VJ 


WHAT  IS  SOCIALISM? 

AN  EXPLANATION  AND  CRITICISM 
OF  THE  DOCTRINES  AND  PRO- 
POSALS OF  "SCIENTIFIC  SOCIALISM" 


BY 

JAMES    EDWARD    LEROSSIGNOL 

Dean  of  the  College  of  Business  Administration,  University  of 

Nebraska,  Author  of  "State  Socialism 

in  New  Zealand,*'  Etc. 


NEW  YORK 

THOMAS   Y.    CROWELL   COMPANY 
PUBLISHERS 


COPYRIGHT.  1921. 
BY  THOMAS  Y.  CROWELL  COMPANY 


Printed  in  U.  S.  A. 


TO 
MY    SISTEB 

ANNIE  ELIZABETH  LE   ROSSIGNOL 


708700 


PREFACE 

The  daring  and  dreadful  experiments  of  the 
Russian  Bolshevists  have  called  attention  in  a 
striking  way  to  the  fact  that  they,  as  professed 
followers  of  Karl  Marx,  are  zealous  adherents 
of  "scientific"  socialism,  though  not  of  the  later, 
more  evolutionary  type.  The  revolution  of 
November  7,  1917,  was  not  a  spontaneous  upris- 
ing of  the  working  class,  but  an  insurrection 
carefully  planned  and  executed  by  a  group  of 
conspirators  who  had  long  awaited  an  oppor- 
tunity of  putting  their  theories  to  the  test  on  a 
gigantic  scale. 

Moreover,  the  leading  socialists  throughout  the 
world,  though  for  the  most  part  evolutionists 
and  anti-Bolshevist,  are  Marxists  of  one  kind  or 
another,  and  are  watching,  waiting  and  working 
for  the  social  revolution.  As  their  gospel  makes 
a  strong  appeal  to  millions  of  people,  it  is  a  ques- 
tion of  more  than  academic  interest  whether  the 
Marxian  theories  are  really  scientific,  or  whether 
they  are  only  sophistries  masquerading  in  scien- 
tific garb. 

Fortunately,  the  Marxian  system  arranges 
itself  in  a  series  of  propositions  which  proceed  in 


vi  PREFACE 

logical  order  like  the  theorems  of  Euclid,  and  the 
writer  has  taken  advantage  of  that  to  examine 
them  one  by  one,  and  as  closely  related  parts  of 
a  single  whole.  A  considerable  part  of  an  earlier 
work,  "Orthodox  Socialism,"  now  out  of  print, 
has  been  included  in  the  present  volume,  though 
altogether  revised  and  rewritten. 

The  writer  desires  to  thank  several  of  his 
friends  and  colleagues,  especially  Professors  F. 
M.  Fling,  Guernsey  Jones,  Donald  McFayden, 
G.  O.  Virtue,  J.  E.  Kirshman,  P.  W.  Ivey, 
T.  T.  Bullock,  Mr.  Leo  Pasvolsky,  Mr.  J.  A. 
Cejnar  and  Mr.  Maurice  Smith,  for  helpful  criti- 
cism and  suggestions. 

J.  E.  LE  ROSSIGNOL. 

Lincoln,  Nebraska, 
August  25,  1921. 


CONTENTS 

INTRODUCTION 

Origin  of  Modern  Socialism — Socialism  is  a  Caricature — 
Character  of  the  Movement — The  Appeal  of  So- 
cialism   Page  1 

I 
THE  CREED  OF  SOCIALISM 

Types  of  Socialists — The  Founder  of  Modern  Socialism — 
Higher  Criticism — Socialism  is  Not  a  Science — Party 
Unity  Desired — The  Communist  Manifesto — Orthodox 
Doctrines  of  Socialism — The  Partial  Dis- 
senters  Page  7 

II 
THE  SECTS  OF  SOCIALISM 

Propaganda,  and  Tactics — Christian  Socialism — Fabian 
Socialism — State  Socialism — Syndicalism — Sabotage — 
The  General  Strike — The  Industrial  Union — The 
I.  W.  W. — Guild  Socialism — Bolshevism — Marx  a 
Dual  Personality — Communism — Anarchism — Social- 
ism Different  in  Every  Country — American  Socialist 
Parties Page  22 

III 
THE  ECONOMIC  INTERPRETATION  OF  HISTORY 

The  Hegelian  Method — The  Marxian  Theory — Applica- 
tions— Modern  Examples — Contradictions — Non-Eco- 
nomic Instincts — Marxian  View  Narrow — Historical 
Explanation  Difficult — Prophecy — The  Class  Struggle 
—Economic  Interpretation  Rejected  .  .  Page  51 
vii 


viii  CONTENTS 


IV 
THE  MARXIAN  THEORY  OF  VALUE 

Ricardo's  Labor-Cost  Theory  Adapted — Marx's  Adapta- 
tion— Importance  of  the  Theory — Fatal  Exceptions — 
Where  Theory  Collapses— The  Factor  of  Scarcity— 
The  Factor  of  Social  Utility  —  Mine  and  Farm 
Costs  —  Manufactured  Goods  —  Marx's  Admission — 
Utility  —  Brairf  Work  —  Labor-Cost  Theory  Discred- 
ited   Page  69 


THE  MARXIAN  LAW  OF  INCREASING  MISERY 

Living  Costs  Determine  Wages — Socialist  Interpretation — 
Marx  Twists  Theory  of  Malthus — Pessimism  and 
Optimism  of  Marx — Earlier  Conditions  of  Working 
Class — Changes  in  the  Conditions  of  Workers — Labor 
Conditions  in  the  United  States — W..  I.  King's  Find- 
ings— Admissions  of  Socialists — Marxism  With  Marx 
Left  Out — Inconsistency  of  Socialists  .  .  Page  85 

VI 
THE  MARXIAN  THEORY  OF  SURPLUS  VALUE 

A  Concrete  Example — Labor  and  Capital — Marx's  Cele- 
brated Puzzle — Commercial  Capital — Distribution  of 
Wealth — The  Share  of  Labor — Conditions  in  the 
United  Kingdom — The  Effect  of  Saving — The  Nation's 
Income — The  Capitalistic  Class — Rcny  Interest  and 
Prpfit— Two  Sides  to  the  Picture — The  Benefits  of 
Capitalism ,•'.".  Page  102 

VII 
SOCIALIST   ECONOMICS   OF   MACHINERY 

Marx's  Views  on  Machinery — A  Plausible  Case — Contra*- 
dictions — Machinery  May  Displace  Labor — Machinery 


CONTENTS  ix 


Makes  for  Shorter  Day — Machinery  Not  a  Blight — 
Men  Not  Displaced  by  Women — Domestic  and  Pro- 
fessional Workers Page  127 

VIII 
THE  SOCIALIST  THEORY  OF  CRISES 

Marxian  View  of  Crises — Foreign  Commerce — Socialist 
Theory  is  False — Self-Contradiction — Socialist  Proph- 
ecy Groundless  —  The  Present  Crisis  —  Protective 
Tendencies Page  144 

IX 

THE   MARXIAN   THEORY  OF  THE 
CONCENTRATION  OF  CAPITAL 

Marx  Anticipated — Agriculture — Wholesale  and  Retail 
Trade — The  Financial  Power — Manufacturing — Dif- 
fusion of  Ownership Page  160 


THE  MARXIAN  PROPHECY  OF  THE 
ELIMINATION  OF  THE  MIDDLE  CLASS 

The  Middle  Class — Agriculture — Manufacture — Profes- 
sions and  Skilled  Labor — Middle  Class  Domin- 
ant   Page  173 

XI 

THE  MARXIAN  THEORY  OF   THE   CLASS 
STRUGGLE 

Hegel  and  Darwin — Theory  of  the  Origin  of  Classes — 
Contradictory  Historical  Data — Satisfaction  in  All 
Society — Modern  Conditions — Marx's  Prophecy  Un- 
fulfilled— The  Triple  Alliance  in  England — Future  of 
the  Class  Struggle Page  181 


CONTENTS 


XII 
THE  SOCIAL  REVOLUTION 

Method  of  the  Revolution — Marx's  Contradictions — Dar- 
winism and  Marx — Biological  and  Social  Evolution — 
How  Revolutions  Have  Occurred — Marx's  Prophecies 
Not  Fulfilled — Capitalism  Evolutionary — Prophecy  of 
Final  Overthrow — Strength  of  Capitalism — Reason  or 
Passion? — Emotionalists Page  193 

XIII 

BOLSHEVISM,  OR  THE  DICTATORSHIP  OF  THE 
COMMUNIST  PARTY 

The  "Yellows"  and  the  "Reds"— Marx  the  Prophet  of  All 
Sects — Two  Revolutions  Expected — The  Revolution  of 
1917 — Bolshevists  Secure  Control — The  Coup  d'etat 
— The  Central  Executive  Committee — The  Peasantry 
— The  Industrial  Workers — Economic  Breakdown — 
Individual  Liberty  Suppressed — Civilization  in  Peril 
— Industrial  Reconstruction — Capitalism  Coming  Back 
— The  Third  International — Bolshevism  is  Revolu- 
tionary Marxism Page  208 

APPENDIX 

The  Nonpartisan  League Page  239 

Selected  List  of  Books  in  English  ....     Page  253 
Index Page  261 


CTJOtf  £;  V1 


The  purpose  of  the  following  chapters  is  to 
present  a  brief  exposition  and  criticism  of  the 
chief  points  of  Marxian  socialism,  also  called 
"scientific"  socialism.  That  the  fundamental 
theories  of  socialism  are  far  from  scientific  has 
often  been  shown,  yet  many  intelligent  people 
are  not  aware  of  the  fact.  Certainly,  in  these 
days  of  discontent,  when  many  panaceas  -are  of- 
fered for  social  ills,  it  should  be  worth  while  -to 
examine  their  claims  before  they  are  tried  on  the 
patient,  and  it  is  found,  by  sad  experience,  that 
the  remedy  is  worse  than  the  disease. 

As  we  consider  the  place  of  socialism  in  history 
and  the  development  of  socialistic  thought  from 
Plato  to  Lenin,  we  see  that  four,  if  not  five, 
rather  clearly  marked  types  have  successively 
appeared. 

The  first  socialists  were  philosophers,  like 
Plato  and  Sir  Thomas  More,  who,  deploring  the 
evils  of  their  day,  had  visions  of  ideal  states,  but 
never  tried  to  create  a  working  model. 

In  the  second  stage,  which  came  with  the  in- 
dustrial and  political  revolution  of  the  eighteenth 
century,  socialistic  ideas  took  hold  of  earnest  but 
visionary  men,  like  Robert  Owen  in  England  and 
Fra^ois  Fourier  in  France,  who  believed  that 
they  could  actually  construct  and  operate  ideal 

l 


2  INTRODUCTION 


communities,  and  were  .not  convinced,  by  re- 
peated failure,  that  their  plans  were  unworkable. 

Origin  of  Modern  Socialism. — In  the  middle 
of  the  nineteenth  century,  when  it  was  evident 
that  the  twin  revolutions  had  failed  to  bring  per- 
fect liberty,  equality  and  fraternity  to  the  world, 
and  when  modern  science  had  well  begun  its 
great  career,  Karl  Marx  proclaimed  the  "scien- 
tific" discovery  that  a  revolution  was  latent  in 
the  very  constitution  of  capitalistic  society,  and 
that,  because  of  exploitation,  increasing  misery, 
and  the  disaffection  of  the  working  class,  the  day 
of  socialism  was  at  hand. 

About  the  beginning  of  the  present  century, 
when  skepticism  had  undermined  the  faith  of 
theoretical  socialists,  and  the  rank  and  file  began 
to  mutiny  against  the  soft -handed  "intellect- 
uals," the  direct  actionists  came  to  the  fore,  im- 
patient, revolutionary  evangelists,  calling  on  the 
workers  to  arise  and  spare  not. 

Finally,  after  the  World  War,  and  the  revolu- 
tions in  Russia  and  Germany,  we  find  in  those 
countries  the  administrative  socialists,  the  social- 
ists in  office,  who,  having  assumed  large  responsi- 
bility, and  with  the  lives  of  millions  in  their 
keeping,  are  forced  to  compromise  with  the  old 
order,  and,  having  driven  capitalism  out  by  the 
front  door,  let  it  come  back  by  the  cellar  window. 

Socialism  was  in  the  world  long  before  the 


INTRODUCTION 


time  of  Marx,  and  will  be,  long  after  his  theo- 
ries have  been  discarded.  "Scientific"  socialism, 
then,  is  but  a  passing  phase  of  the  eternal  protest 
against  things  as  they  are,  which  follows  human 
society  like  a  shadow,  and  would,  like  Satan  in 
the  Book  of  Job,  play  a  leading  part  in  the  New 
Jerusalem. 

Such  being  the  case,  it  might  seem  futile  to 
offer  criticism  of  "scientific"  socialism,  but  for 
the  fact  that  socialism,  in  its  scientific  garb,  goes 
about  in  borrowed  prestige,  authority  and  force 
which  do  not  belong  to  mere  visions,  Utopian 
schemes,  and  bitter  rebellion  against  the  inevit- 
able evils  of  every  social  system.  If  socialism 
has  a  right  to  the  cloak  of  science,  it  may  wear  it, 
but  if  not,  it  must  appear  in  its  proper  shape  and 
be  judged  according  to  its  real  character  and 
intentions. 

Socialism  Is  a  Caricature. — Certainly,  social- 
ism, as  a  system  of  thought,  is  a  remarkable 
structure,  the  parts  of  which  seem  at  first  sight 
to  fit  together  so  well  as  to  prove  that  it  must  be 
a  real  picture  of  capitalistic  society,  and  a  true 
prophecy  of  coming  change.  And  yet,  a  closer 
examination  shows  that  fallacy  and  half-truth 
pervades  every  part  and  that  the  entire  system, 
with  all  its  plausibility  and  apparent  consistency, 
is  a  mere  caricature  of  the  industrial  world  as  it 
really  is. 


INTRODUCTION 


Much  of  this  critical  examination  has  been 
made  by  socialists  themselves,  the  more  scholarly 
intellectuals,  who  are  often  called  "revisionists," 
because  they  wish  to  make  the  theories  of  Marx 
square  with  facts.  To  such  an  extent  has  this 
"higher  criticism"  undermined  the  faith,  that  the 
most  fundamental  theories  stand  disproved  or 
discredited  in  the  minds  of  many  socialists. 

These  more  enlightened  leaders  no  longer 
believe  as  once  they  did,  and  if  they  still  proclaim 
the  orthodox  creed,  as  some  do,  it  is  because  the 
old  words  come  readily  to  the  tongue,  the  old  gos- 
pel is  preachable,  and  the  old  promises  still  have 
power  «to  stir  the  soul.  Of  course,  most  of  the 
agitation  is  done  by  the  less  intellectual,  who  still 
believe.  As  to  the  rank  and  file,  they  are  dis- 
posed to  believe  and  feel  and  do,  without  looking 
too  closely  into  the  rational  basis  of  their  faith. 

Character  of  the  Movement. — But  if  the  ra- 
tional basis  is  not  there,  it  is  surely  well  for  all 
concerned  to  known  where  they  stand.  If  social- 
ism as  a  system  of  thought  is  unscientific  and  un- 
sound, then  it  is  still  where  it  was  in  the  days  of 
Plato,  More,  Owen,  Fourier,  and  the  rest.  And 
if  the  economic  analysis  and  doctrines  are  false, 
upon  what  foundation  of  science  or  reason  does 
the  proposed  new  system  of  social  reconstruction 
rest? 

Socialism  can  still  be,  and  is?  a  denunciation  of 


INTRODUCTION 


capitalism,  according  to  which  most  of  the  ills  of 
life  are  attributable  to  private  property. 

It  is  still  a  highly  imaginary  scheme  of  social 
organization,  which,  socialists  believe,  would  be  a 
panacea  for  most,  if  not  all,  the  ills  that  flesh  is 
heir  to. 

It  is  still  a  murmur  of  discontent  among  the 
poor,  a  movement  toward  a  social  revolution,  and 
a  determination  to  carry  out,  on  a  national  or 
international  scale,  the  plans  which  they  hasre 
seen  in  their  dreams. 

It  is  still  a  promise  of  a  Golden  Age,  that 
allures  and  blinds  and  disappoints,  like  the  will- 
o-the-wisp,  or  the  pot  of  gold  at  the  foot  of  the 
rainbow. 

The  Appeal  of  Socialism. — All  this  is  left,  and 
socialism  still  appeals,  and  will  appeal,  to  people 
of  a  certain  temperament — the  sanguine,  emo- 
tional, uncritical,  visionary,  credulous,  impatient, 
intemperate,  explosive — but  surely  not  to  sane, 
rational,  well-balanced  men  of  common  sense, 
who  are  the  only  safe  pilots  in  stormy  and  un- 
charted seas. 

It  is  not  a  useless  task,  therefore,  to  expose  the 
unscientific  pretensions  of  "scientific"  socialism, 
unless  it  be  true  that  man  is  not  a  rational 
animal,  but  swayed  to  such  an  extent  by  emotion 
and  passion  that  he  will  be  ready  to  break  up  the 
present  imperfect  scheme  of  things  industrial,  on 


6  INTRODUCTION 


the  chance  of  being  able  to  fashion  out  of  the 
wreck  something  nearer  to  the  heart's  desire. 

Yet  the  experience  of  Russia  makes  one  be- 
lieve such  childish  folly  possible,  and  there  are 
people  in  every  country  who  wish  to  follow  that 
example.  Also,  there  are  those  who  are  moving 
in  that  direction,  though  they  do  not  see  the  end 
of  the  road.  Professor  Franklin  H.  Giddings, 
of  Columbia  University,  recently  wrote  these  sig- 
nificant words:  "The  whole  world  at  present  is 
intellectually  muddled  and  morally  bedeviled.  It 
is  trying  to  reconstruct  society  upon  a  hypotheti- 
cal equality  of  all  mankind.  If  it  succeeds,  it  will 
destroy  historic  achievement  from  the  beginning, 
and  will  send  mankind  to  perdition." 

Socialism  may  not  stand  for  absolute  equality, 
but  there  can  be  no  doubt  that  its  trend  is 
strongly  in  that  direction.  It  lays  itself  open  to 
~-f~  the  charge  of  Plato,  who  said,  in  substance,  that 
nothing  is  more  unequal  than  the  equal  treat- 
ment of  unequals.  The  exploitation  of  the  many 
by  the  few  is  bad,  no  doubt ;  but  the  exploitation 
of  the  few  by  the  many,  the  exceptional  men  by 
the  sluggish  horde,  the  torch-bearers  of  civiliza- 
tion by  those  who  walk  in  darkness,  means  not 
only  the  abolition  of  private  property,  initiative 
and  enterprise,  but  the  destruction  of  our  present 
civilization — and  what  will  follow  that,  no  man 
knows. 


THE  CREED  OF  SOCIALISM 

Like  every  expression  of  human  life  and 
character,  socialism  is  new  in  form,  but  old  in 
spirit.  Envy  and  pity  are  as  old  as  happiness 
and  misery,  and  from  such  a  soil  in  every  age 
has  sprung  a  vigorous  growth  of  protest  and  re- 
bellion. The  inequality  of  men  is  the  most  strik- 
ing fact  in  human  history.  Always  have  there 
been  strong  and  weak,  master  and  servant,  rich 
and  poor,  according  to  the  law  of  the  old-time 
struggle: — 

"That  they  should  take  who  have  the  power, 
And  they  should  keep  who  can."  1 

Opposed  to  the  fact  of  inequality  and  aristoc- 
racy is  the  ideal  of  equality  and  democracy, 
largely  derived  from  Christianity.  Creatures  of 
one  God,  children  of  a  common  ancestor,  similar 
in  form  and  feature,  intellect  and  appetite,  why 
should  not  the  sons  of  men  live  together  as  mem- 
bers of  a  single,  loving  family?  Why  should  the 

i  William  Wordsworth,  Rob  'Roy's  Grave. 
7 


8  THE  CREED  OF  SOCIALISM 

good  things  of  life  belong  to  a  few,  and  the 
crumbs  of  the  table  to  all  the  rest? 

"When  Adam  delved  and  Eve  span 
Who  was  then  the  gentleman?"  1 

Out  of  a  strong  desire  for  better  things  has 
come  the  belief  that  better  things  are  possible. 
Man  is  a  born  dreamer.  He  puts  a  halo  about 
the  past  and  sees  the  future  in  a  golden  mist. 
The  poor  of  this  world,  always  rich  in  faith,  have 
conceived  the  thought  of  a  perfect  world,  and  the 
desire  of  their  heart  they  believe  they  will  one 
day  attain.  This  desire  and  this  faith  is  the  spirit 
of  socialism. 

Types  of  Socialists. — There  are  at  least  three 
kinds  of  socialists:  the  instinctive,  the  Utopian, 
and  the  scientific.  The  socialist  by  instinct 
merely,  not  knowing  that  he  is  a  socialist,  under- 
estimating the  strength  of  the  propertied  classes, 
appeals  to  the  crude  and  primitive  rue  of  force, 
commits  acts  of  violence  and  terror,  and  in  him 
is  fulfilled  the  significant  prophecy:  "They  that 
take  the  sword  shall  perish  by  the  sword."  The 
passionate,  short-sighted  rebel  dies  before  his 
time,  and  his  misguided  followers  sooner  or  later 
realize  that  they  have  only  discredited  the  cause 
they  hoped  to  serve. 

The  Utopian  socialist,  with  his  Plato,  More,  or 

i  Rhyme  attributed  to  the  "mad  priest,"  John  Ball,  before  the 
Peasants'  Rebellion  of  1381. 


THE  CREED  OF  SOCIALISM  9 

Bellamy,  comes  to  comfort  the  distressed  with  a 
glowing  picture  of  a  golden  age,  a  heaven  on 
earth,  a  New  Jerusalem  of  peace  and  prosperity, 
where  the  hungry  shall  eat,  the  thirsty  shall 
drink,  and  all  tears  shall  be  wiped  away.  How 
alluring  the  scheme  of  perfect  harmony,  how 
just  the  method  of  distribution,  how  attractive 
to  the  imagination,  how  satisfying  to  the  soul, 
and  yet  how  visionary,  intangible,  impossible — a 
city  of  dreams,  a  mirage  of  the  desert! 

The  "scientific"  socialist  is  the  only  socialist 
worthy  of  the  name.  The  philosophy  of  Hegel, 
the  economics  of  Ricardo,  and  the  biology  of 
Darwin  combine  in  him  to  produce  a  system  of 
social  theory  the  most  remarkable  that  the  world 
has  seen. 

The  Founder  of  Modern  Socialism. — Hein- 
rich  Karl  Marx  (1818-1883),  by  birth  a  Jew,  is 
the  Moses  of  socialism,  its  leader,  lawgiver,  and 
prophet.  His  great  book,  "Capital,"  is  often 
called  "the  Bible  of  the  working  class."  In  this 
and  other  works  he  expounded  the  principles  of 
scientific  socialism,  which  are  thought  to  give 
such  knowledge  of  past  history  and  such  insight 
into  present  economic  tendencies  as  to  justify 
the  assertion  that  the  revolution  is  at  hand,  and 
the  "millennium"  about  to  be  ushered  in. 

The  "scientific"  socialist  of  the  orthodox  type 
is  very  sure  of  his  ground,  ^  The  present  has  no 


10  THE  CREED  or  SOCIALISM 

mystery  for  him;  the  future  is  like  an  open  book. 
To  him  people  are  divided  into  three  classes: 
knaves,  fools,  and  socialists.  If  you  do  not  know 
Marx  you  are  a  fool.  If  you  know,  and  do  not 
believe,  you  are  a  knave,  or,  at  best,  a  parasite. 
If  you  know  and  believe  you  are  a  socialist,  one 
of  the  elect. 

Yet  nobody  should  be  offended  when  such 
epithets  are  used  in  the  course  of  a  scientific  dis- 
cussion, for  it  is  quite  proper  to  call  men  para- 
sites, exploiters,  robbers,  and  the  like,  so  long  as 
it  is  done  in  a  scientific  spirit,  which,  as  Marx 
puts  it,  "deals  with  individuals  only  in  so  far  as 
they  are  personifications  of  economic  categories, 
embodiments  of  particular  class  interests  and 
class  relations."  l 

Higher  Criticism. — Socialism  has  always  had 
its  enemies  among  outsiders,  but  of  late  years  a 
sort  of  "higher  criticism"  has  sprung  up  within 
the  fold,  and  many  professed  socialists  have  be- 
gun to  doubt  doctrines  formerly  considered  fun- 
damental. For  such  opinions  some  have  been 
cast  out  of  the  synagogue,  while  others,  suspect- 
ed of  heresy,  have  lost  influence  with  their  more 
orthodox  comrades,  who  demand  rigid  adherence 
to  old-line  Marxism.  "Better  a  declared  enemy," 
they  say,  "than  a  half-hearted  friend." 

The  enlightened  socialist,  or  "revisionist,"  un- 

iKarl  Marx,  Capital,  Vol.  I,  Author's  Preface. 


THE  CREED  OF  SOCIALISM  11 

able  to  deny  the  validity  of  the  newer  criticism, 
is  careful  to  separate  the  wheat  from  the  chaff  of 
Marxian  doctrine.  If  Marx  be  shown  to  have 
made  a  mistake,  he  will  say  that  the  point  is  not 
essential,  and  will  withdraw  to  the  main  line  of 
the  Marxian  system,  which,  he  thinks,  can  never 
be  pierced.  But  if  it  were  proved  beyond  a 
doubt  that  the  whole  teaching  of  Marx  is  fal- 
lacious, both  in  premises  and  conclusion,  the  con- 
firmed socialist  would,  if  necessary,  abandon  his 
great  teacher,  holding  that  socialism,  greater 
than  Marx  or  any;  other  man,  can  stand  on  its 
own  foundations. 

Finally,  if  it  could  by  any  possibility  be  shown 
that  socialism,  as  a  system  of  thought  is  utterly 
false,  the  true  socialist  would  retreat  to  his  last 
stronghold  and  say  that  socialism,  at  bottom,  is 
not  a  system  of  thought,  but  a  process  of  social 
evolution,  a  law  of  the  industrial  world  irresis- 
tibly moving  on  toward  its  final  destiny. 

To  say  this  is  to  substitute  assertion  for  proof, 
feeling  for  reason,  faith  for  knowledge,  mere 
(messing  for  scientific  demonstration.  And  yet, 
dogmatism  such  as  this  appeals  to  people  of  a 
certain  type,  who,  when  they  have  closed  their 
minds  to  doubt,  are  more  vehement  than  ever  in 
proclaiming  their  opinions.  And,  strange  to  say, 
their  powerful  suggestions  carry  conviction  to 


12  THE  CREED  OF  SOCIALISM 

many  hearers,  with  little  support  in  logic  or 
reason. 

It  may  be  that  feeling  lies  deeper  than  reason, 
that  faith  is  more  reliable  than  science,  that  we 
should  believe  in  order  that  we  may  know;  but 
the  Marxian  socialist  does  not  consciously  enter- 
tain such  views  as  these  and  will  not  uphold  them 
except  as  a  last  resort. 

If  socialism  is  a  science,  how  is  it  that  social- 
ists display  so  little  of  that  openness  of  mind, 
that  love  for  truth,  that  indifference  to  contra- 
diction, that  sublime  patience  so  characteristic  of 
the  true  scientific  spirit? 

Socialism  Not  a  Science. — In  fact,  socialism  is 
not  a  science  at  all,  but  a  sort  of  faith,  or  religion. 
Science  for  the  socialist  is  a  mere  tool,  a  means  to 
an  end,  to  be  discarded  'after  it  has  served  its  pur- 
pose. For  him  science  is  but  the  handmaid  to 
religion. 

In  these  days,  when  we  have  a  psychology 
without  a  soul,  let  it  not  be  thought  strange  that 
we  have  a  religion  without  a  god.  Like  most 
religions,  Socialism  has  its  prophet  and  its  book. 
Like  all  religions,  it  has  its  creed,  which  the 
orthodox  hold  with  the  utmost  dogmatism  and 
intolerance.  The  twin  passions  of  love  and  hate 
supply  the  motive  power,  and  a  firm  conviction 
that  the  social  revolution  is  at  hand  is  a  source  of 


THE  CREED  OF  SOCIALISM  13 

great  enthusiasm  in  the  propaganda  for  the  con- 
version of  the  world. 

Socialists  are  optimistic  to  the  last  degree. 
Unbounded  is  their  faith  in  man;  brilliant  the 
destiny  they  predict  for  him.  The  socialist  is 
essentially  a  prophet.  Believing  himself  able  to 
read  the  signs  of  the  times,  he  does  not  hesitate 
to  say  that  he  can  foresee,  in  outline,  at  least,  the 
changes  that  will  take  place  in  time  to  come.  His 
prophecy,  as  he  says,  is  not  Utopian,  as  of  those 
who  merely  dream  and  hope  for  a  better  world; 
but  scientific,  like  the  forecasts  of  the  weather 
bureau,  or  the  predictions  of  a  chemist  who 
knows  what  is  coming  out  of  a  combination  be- 
cause he  knows  what  has  been  put  into  it.  Scien- 
tific prophecy,  that  is  socialism. 

Party  Unity  Desired. — The  International 
Socialist  Congress,  which  met  in  Amsterdam  in 
August,  1904,  adopted  the  following  resolution: 

"The  Congress  declares  that  in  order  that  the 
working-class  may  develop  its  full  strength  in 
the  struggle  against  capitalism,  it  is  necessary 
that  there  should  be  but  one  socialist  party  in 
each  country  as  against  the  parties  of  the  capital- 
ists, just  as  there  is  but  one  proletariat  in  each 
country.  For  these  reasons  it  is  the  imperative 
duty  of  all  comrades  and  all  socialist  organiza- 
tions to  strive  to  the  utmost  of  their  power  to 
bring  about  this  unity  of  the  party,  on  the  princi- 


14  THE  CREED  or  SOCIALISM 

pies  established  by  the  international  congresses, 
that  unity  which  is  necessary  in  the  interest  of  the 
proletariat  to  which  they  are  responsible  for  the 
disastrous  divisions  in  their  ranks." 

In  these  days  of  independent  thought  it  is 
common  to  speak  slightingly  of  creeds,  but  when 
men  unite  for  religious,  moral,  political,  or  eco- 
nomic ends,  they  find  that  success  cannot  be 
attained  without  a  certain  union  in  thought,  feel- 
ing, and  purpose.  In  the  words  of  the  prophet, 
"Can  two  walk  together  except  they  be  agreed?" 

In  early  times,  when  philosophers  like  Plato, 
More,  and  Campanella  saw  visions  of  ideal 
states,  the  question  of  uniformity  in  belief  was  of 
no  consequence  to  themselves  nor  to  the  world  at 
large. 

When  more  zealous  socialists,  like  Owen  and 
Fourier,  began  to  establish  their  experimental 
communities — "duodecimo  editions  of  the  New 
Jerusalem,"  as  Marx  called  them — unity  in  faith 
was  seen  to  be  a  matter  of  vital  importance. 
Associations  of  philosophers  and  literary  people, 
like  Brook  Farm  Community  near  Boston, 
speedily  failed;  while  communities  of  simple- 
minded  believers,  with  a  common  religious  creed, 
like  the  Shakers  and  the  Amana  Community, 
have  continued  to  exist  until  the  present  day. 

The  Communist  Manifesto. — But  when,  in 
the  revolutionary  agitation  of  1848,  socialists  of 


THE  CREED  OF  SOCIALISM  15 

all  countries  and  every  sect  began  to  be  conscious 
of  a  common  purpose,  the  time  was  ripe  for  the 
formulation  of  a  creed  that  should  unite  the  revo- 
lutionary forces  throughout  the  world.  The  hour 
was  come,  and  the  man.  The  man  was  Karl 
Marx,  who  with  his  friend  Friedrich  Engels, 
drew  up  in  London,  in  January,  1848,  the 
"Manifesto  of  the  Communist  Party,"  the  first 
formal  utterance  of  the  creed  and  program  of 
"scientific"  socialism. 

For  some  years  thereafter  the  international 
faith  had  few  converts,  but  after  the  publication, 
in  1867,  of  the  first  volume  of  "Capital"  the 
views  of  Marx  spread  with  great  rapidity.  In 
the  election  of  1912,  German  socialists  polled 
4,238,000  votes  out  of  12,188,000,  and  secured 
110  seats  in  the  Reichstag.  At  that  time  it  was 
estimated  that  the  socialist  voters  of  the  world 
numbered  about  10,000,000,  most  of  whom  were 
Marxians  of  one  kind  or  another. 

In  the  presidential  election  of  1912  in  the 
United  States,  Eugene  V.  Debs  received, 
roughly,  900,000  votes  out  of  a  total  of  15,000,- 
000  votes  cast.  In  1916,  Allan  T.  Benson  re- 
ceived about  600,000  out  of  18,500,000.  In  1920, 
Mr.  Debs  received  less  than  1,000,000  votes  out 
of  about  28,000,000,  including  women  voters, 
which  was  a  lower  relative  vote  than  in  1912. 
Doubtless,  the  progress  of  socialism  has  been 


16  THE  CREED  OF  SOCIALISM 

much  hindered  by  the  disastrous  experiment  in 
Russia,  as  well  as  the  behavior  of  many  socialists 
during  the  war. 

Orthodox  Doctrines  of  Socialism. — Orthodox 
socialists  throughout  the  world,  with  all  the 
variations  due  to  nationality,  local  environment, 
temperament,  or  other  causes,  hold  more  or  less 
strongly  the  following  doctrines,  which  may  be 
briefly  expressed  in  a  series  of  propositions: — 

( 1.)  In  a  given  period  of  the  world's  history, 
the  modes  of  production  and  exchange,  or  the 
ways  by  which  people  get  their  living,  determine 
their  whole  political,  social,  intellectual,  legal, 
moral,  and  even  religious  life.  Also,  when  the 
economic  foundations  change,  corresponding 
changes  are  thereby  brought  about  in  the  social 
superstructure.  This  is  the  theory  of  economic 
determinism,  otherwise  known  as  the  material- 
istic or  economic  interpretation  of  history. 

(2.)  The  exchange  value  of  commodities  de- 
pends upon  the  amount  of  socially  necessary 
labor-time  required  to  produce  them.  This  is 
the  labor-cost  theory  of  value. 

(3.)  Although  the  working  class,  the  prole- 
tariat, create  all  wealth,  their  wages  tend  to  equal 
the  bare  cost  of  living.  As  the  rich  grow  richer 
the  poor  grow  poorer,  and  ever  sink  deeper  in 
the  slough  of  pauperism.  This  is  the  iron  law  of 
wages  or  the  theory  of  increasing  misery. 


THE  CREED  OF  SOCIALISM  17j 

(4.)  The  capitalists,  the  bourgeoisie,  take  the 
greater  part  of  the  values  created  by  the  prole- 
tariat in  the  form  of  rent,  interest,  and  profits. 
This  is  surplus  value,  obtained  by  exploitation  or 
robbery. 

(5.)  The  introduction  of  labor-saving  ma- 
chinery and  improved  methods  of  production 
creates  a  vast  reserve  army  of  the  unemployed, 
and  impoverishes  the  whole  working-class,  while 
the  capitalists  accumulate  a  mass  of  commodities 
which  they  can  neither  use  nor  sell.  The  result 
is  chronic  over-production  and  under-consump- 
tion,  with  periodical  crises,  which  threaten  the 
very  existence  of  the  capitalistic  system.  This 
is  the  theory  of  crises  taught  by  Rodbertus,  Marx, 
and  most  orthodox  socialists. 

(6.)  The  unceasing  improvement  in  machin- 
ery and  methods  of  production  causes  industry  to 
be  conducted  on  a  larger  and  larger  scale,  and 
wealth  to  be  concentrated  in  the  hands  of  a  few 
magnates.  This  is  the  law  of  the  concentration 
of  capital. 

(7.)  As  this  process  goes  on,  the  small  manu- 
facturers, shopkeepers,  craftsmen,  and  peasants, 
sink  gradually  into  the  proletariat,  being  ground 
to  pieces  between  the  upper  and  the  nether  mill- 
stone. This  is  the  approaching  elimination  of 
middle  class. 

(8.)      Soon  there  will  be  only  two  classes  left: 


18  THE  CREED  OF  SOCIALISM 

capitalists  and  laborers,  bourgeoisie  and  prole- 
tariat, the  robbers  and  the  robbed.  But  the  pro- 
letariat, the  more  numerous  class,  becoming  con- 
scious of  their  strength,  will  seize  the  political 
power  and  inaugurate  the  social  revolution. 

(9.)  When  the  proletariat  have  done  this 
they  will  gradually  or  speedily  abolish  capitalism 
by  organizing  industry  on  the  basis  of  a  common 
pwnership  and  management  of  the  means  of  pro- 
duction with  an  equitable  distribution  of  the  pro- 
duct, so  as  to  abolish  poverty  and  all  the  other 
evils  of  capitalism. 

(10.)  After  the  advent  of  socialism,  human 
character  will  adapt  itself  to  the  ideal  environ- 
ment ;  all  men,  or  nearly  all,  will  be  industrious 
and  virtuous ;  and  an  era  of  peace,  prosperity,  and 
happiness  will  prevail  until  the  end  of  time. 

(11.)  The  social  revolution  is  coming  and 
nothing  can  prevent  it. 

The  Partial  Dissenters. — The  "higher  critics" 
of  socialism — among  whom  are  Bernstein  of  Ger- 
many, Vandervelde  of  Belgium,  Tugan-Bara- 
nowsky  of  Russia,  Hardie  and  MacDonald  of 
England,  Spargo  and  Hillquit  of  the  United 
States — by  no  means  accept  all  of  the  orthodox 
creed,  but  reject  certain  doctrines  and  modify 
others,  until  there  is  little  difference  between 
them  and  the  unbelieving  reformer  or  the  uncon- 


THE  CREED  OF  SOCIALISM  19 

verted  professor  of  political  economy.  And  yet, 
in  their  public  utterances,  they  often  speak  and 
write  like  true  believers,  as  though  the  rank  and 
file  of  the  socialist  army  should  not  know  how 
little  of  the  old  faith  remains  intact.  Much  of 
the  propaganda  literature  contains  the  old  crude 
doctrines  expressed  in  the  old  familiar  way,  mis- 
leading but  effectual  in  bringing  about  "class 
consciousness"  and  "solidarity"  among  the  work- 
ing class.  Truth  is  sacrificed  to  political  tactics 
and  the  end  is  used  to  justify  the  means — and 
that  by  socialists  who  know  better.  Thus  the 
Roman  augurs  used  to  wink  at  one  another  when 
they  met,  but  turned  a  sober  face  to  the  supersti- 
tious common  people. 

For  example,  these  enlightened  socialists  know 
that  economic  forces  are  not  the  only  factors  in 
social  evolution,  and  that  the  class  struggle  is 
not  the  only  way  to  better  things. 

They  admit  that  the  wage-earners  are  not  the 
sole  creators  of  wealth  and  productive  ideas,  and 
that  the  bourgeoisie,  as  a  class,  render  great  ser- 
vice to  society  in  many  ways. 

They  confess  that  the  labor-cost  theory  of 
value  is  unsound,  and  that  much  of  "surplus 
value"  is  but  a  fair  return  to  capital  and  enter- 
prise. 

They  find  no  law  of  increasing  misery  in  capi- 


20  THE  CREED  OF  SOCIALISM 

talistic  countries,  as  the  condition  of  the  working 
class  is  steadily,  if  slowly,  improving. 

They  suspect  the  accuracy  of  the  orthodox 
theory  of  crises,  and  no  longer  expect  the  capi- 
talistic system  to  break  down  through  overpro- 
duction. 

They  see  that  the  concentration  of  production 
and  wealth  has  its  limits,  and  that  the  middle 
class  is  not  disappearing,  but  increasing  in 
numbers  and  wealth. 

They  are  inclined  to  think  that  socialists  may 
safely  work  with  unconverted  reformers  for  the 
half -loaf  of  partial  betterment  in  social  con- 
ditions. 

They  often  teach  that  the  social  revolution 
may  come,  not  as  a  sudden  cataclysm,  but  rather 
by  gradual  process  of  industrial  evolution. 

Finally,  aghast  at  the  terrible  doings  in 
Russia,  they  repudiate  the  dictatorship  of  the 
proletariat,  and  even  disown  the  revolution,  their 
own  child,  as  an  untimely  birth,  and  because  it 
has,  contrary  to  expectation,  both  teeth  and 
claws. 

But  these  intellectuals,  with  all  their  doubts, 
still  wish  to  remain  within  the  fold,  still  hold  to 
what  they  consider  as  the  essentials  of  socialism, 
and,  with  possibly  a  little  mental  reservation, 
could  honestly  repeat  a  formula  such  as  this:  "I 
believe  in  economic  evolution  and  the  class 


THE  CREED  OF  SOCIALISM  21 

struggle.  I  recognize  exploitation  as  the  essen- 
tial evil  of  capitalism.  I  believe  in  the  prole- 
tariat. I  look  for  the  social  revolution,  the  re- 
generation of  man,  and  the  peace  and  prosperity 
of  democratic  collectivism." 


II 

THE   SECTS  OF   SOCIALISM 

Although  socialists  of  every  belief  have  much 
in  common,  they  are  by  no  means  agreed  on  all 
points  of  theory  and  practice,  and  there  is  serious 
contention  and  division  among  them.  The  body 
of  doctrine  which  they  profess  has  four  main 
parts  or  aspects:  first,  it  is  a  criticism  of  the 
present  industrial  order;  second,  a  philosophy  or 
theory  of  social  evolution;  third,  a  plan  or  ideal 
of  a  new  social  order ;  and  fourth,  a  propaganda 
or  campaign  for  the  destruction  of  capitalism 
and  the  setting  up  of  the  social  commonwealth. 

Practically  all  socialists  are  agreed  in  their 
hatred  of  capitalism,  the  evils  of  which  they  de- 
light to  expose,  as  though  it  were  the  sum  of  all 
iniquity  and  the  cause  of  all  the  troubles  that 
afflict  the  world.  To  be  sure,  Marx  regarded 
capitalism  as  a  necessary  stage  in  social  evolution, 
even  as  some  theologians  regard  Satan  as  a 
necessary  evil  and  part  of  the  divine  order  when 
seen  from  the  long-time  point  of  view. 

Socialism,  as  a  theory  of  social  evolution,  is 
the  materialistic  or  economic  interpretation  of 

22 


THE  SECTS  OF  SOCIALISM  23 

history  and  the  theory  of  the  class  struggle  which 
is  part  of  it.  This,  together  with  the  theories  of 
value  and  surplus  value,  forms  the  center  and 
core  of  "scientific  socialism."  A  few  years  ago 
the  followers  of  Marx  were  generally  agreed  as 
to  this,  but  since  it  has  been  under  fire  of  the 
higher  critics  or  revisionists,  as  well  as  the  econo- 
mists, some  socialists  have  been  much  in  doubt 
as  to  the  scientific  basis  once  thought  so  secure. 

But  it  is  on  the  third  point  that  socialists  differ 
most,  for  when  they  come  to  set  up  a  social  ideal, 
the  likes  and  dislikes  of  no  two  persons  are  the 
same.  "Concerning  tastes  there  can  be  no  dis- 
pute" runs  the  proverb,  because  such  questions 
cannot  be  decided  by  argument  but  by  personal 
choice  alone. 

Some  socialists  prefer  the  fanciful  schemes  of 
the  Utopians;  some  love  to  think  of  the  New 
Jerusalem,  the  City  of  God;  some  glorify  state 
socialism;  some  swear  by  syndicalism,  industrial 
unionism,  or  national  guilds;  and  some  would 
have  so  little  of  state  control  as  to  come  very 
near  the  ideal  of  anarchism.  In  these  disputes 
about  the  Golden  Age,  which  every  man  creates 
for  himself,  the  scientific  side  of  socialism  goes 
into  the  background,  the  Utopian  comes  to  the 
fore,  and  the  imagination  is  given  free  rein.  In 
fact,  the  Russian  socialist,  Tugan-Baranowsky, 


24  THE  SECTS  or  SOCIALISM 

freely  admits  that  socialism  is  more  Utopian  than 
scientific,  holding  that  its  utopianism  is  the  chief 
source  of  its  strength. x 

Propaganda  and  Tactics. — Finally,  on  the 
fourth  point — propaganda  and  tactics — there  is 
much  difference  of  opinion,  as  there  must  be 
among  men  of  various  types  and  temperaments. 
Some,  like  the  Utopians,  think  that  the  beauty 
and  attractiveness  of  their  ideal  plans  will  con- 
vert the  world.  Others,  like  the  Fabians,  expect 
the  new  age  to  come  little  by  little,  and  are  will- 
ing to  wait  for  the  mills  of  the  gods  to  grind  out 
their  grist.  Still  others,  like  the  evolutionary 
Marxists,  believe  that  the  revolution  will  come 
by  the  proletariat's  peacefully  voting  themselves 
to  power;  while  the  more  impatient  demand 
direct  action,  and  the  violent-minded  favor  a 
bloody  insurrection. 

The  sects  of  socialism,  then,  though  having  a 
common  creed,  differ  widely  in  their  ideals  of  the 
future  and  in  their  selection  of  ways  and  means, 
and  there  is  no  prospect  of  unity  in  plan  and 
purpose. 

Utopian  Socialism. — Utopian  socialism,  as  the 
name  implies,  is  something  fanciful,  and  varies 
with  the  imagination  or  caprice  of  the  poet, 
philosopher  or  prophet  who  dreams  about  a 
better  world.  Utopia,  or  the  land  of  nowhere, 

i  Tugan-Baranowsky,  Modern  Socialism,  Preface. 


THE  SECTS  OF  SOCIALISM  25 

was  an  imaginary  kingdom  described  by  Sir 
Thomas  More,  a  great  English  scholar  and 
statesman  of  the  sixteenth  century.  More  got 
his  inspiration  from  the  Greek  philosopher 
Plato,  whose  "Republic"  was  the  first  of  the 
Utopias.  It  is  worth  noting  that  Plato,  realizing 
the  impossibility  of  his  ideal,  wrote  another  book, 
"The  Laws,"  in  which  he  described  a  second-best 
state,  not  very  different  from  his  own  Athens, 
which  he  thought  might  be  successful  with 
human  beings  as  they  were.  It  might  be  well  if 
socialists  of  the  present  day  were  as  wise  as 
Plato. 

"Scientific"  socialists  are  inclined  to  regard  all 
the  predecessors  of  Marx  as  Utopians.  Saint 
Simon,  therefore,  in  some  respects  a  greater  man 
than  Marx,  is  classed  as  Utopian,  although  he 
anticipated  the  Marxian  theory  of  social  evo- 
lution and  was  one  of  the  founders  of  state  social- 
ism. Fourier,  another  French  socialist,  is  put  in 
the  same  class,  although  he  had  many  brilliant 
ideas  and  was  the  father  of  internationalism  in 
that  he  suggested  a  federation  of  the  world. 
Robert  Owen,  who  established  a  model  factory 
at  New  Lanark,  in  Scotland,  and  later  spent  his 
time  and  money  in  promoting  experimental  com- 
munities in  New  Harmony,  Indiana,  and  else- 
where, is  called  Utopian,  although  he  was  one  of 
the  founders  of  the  common  school,  did  much 


26  THE  SECTS  OF  SOCIALISM 

for  factory  legislation,  and  was  a  pioneer  in 
efficient  management. 

Many  other  noted  socialists  are  classed  as 
Utopian  because,  without  a  "scientific"  basis  for 
their  theories,  they  thought  that  they  could  in- 
vent a  workable  scheme  of  social  organization, 
and  put  it  into  operation  without  waiting  until 
the  time  was  ripe  and  the  people  ready  for  the 
new  order  of  things.  All  of  these  laboratory 
experiments  have  failed,  as  might  have  been  ex- 
pected, and  Marxian  socialists  have  trouble  in 
explaining  why  they  failed  without  suggesting 
the  probable  failure  of  their  own  brand  of  social- 
ism, when  tried  on  a  national  or  international 
scale. 

It  is  easy  to  call  these  men  Utopians,  and  thus 
condemn  them  with  a  name,  but  if  all  their  con- 
tributions to  socialism  were  taken  away,  there 
would  be  nothing  left  but  a  few  discredited 
"scientific"  theories.  On  the  other  hand,  when 
the  "scientific"  part  of  Marxism  is  refuted  or 
explained  away,  it  is  the  Utopian  residue  that 
constitutes  the  chief  strength — or  weakness — of 
modern  socialism. 

Christian  Socialism. — Christian  socialism  is 
not  socialism  at  all,  from  the  Marxian  point  of 
view,  for  the  Christian  does  not  believe  in  the 
materialistic  interpretation  of  history,  nor  in  the 
class  struggle,  nor  in  the  social  revolution,  nor 


THE  SECTS  OF  SOCIALISM  '  27 

does  he  exalt  the  proletarian  because  he  is  poor, 
nor  condemn  the  rich  because  he  is  rich.  The 
Christian  Church,  in  so  far  as  it  is  like  its 
Founder,  is  the  friend  of  the  poor,  but  preaches 
the  gospel  to  rich  and  poor  alike,  laying  chief 
stress  on  character,  though  seeing  also  the  need 
of  improved  conditions  of  life. 

Christian  socialism  goes  back  to  the  early 
Church,  when  the  disciples  "had  all  things  in 
common,"  but  the  first  great  writer  on  the  sub- 
ject was  Saint  Thomas  of  Aquinas,  who  is  a 
high  authority  to-day,  especially  in  the  Roman 
Catholic  Church.  He  taught  that  in  an  ideal 
state  private  property  would  be  necessary, — 
first,  because  of  the  interest  which  the  owner 
takes  in  the  management  of  his  property;  second, 
because  it  tends  toward  a  better  organization  of 
production;  third,  because  private  industry  is 
carried  on  with  less  of  that  wrangling  and  con- 
flict which  results  when  property  is  held  in 
common.  On  the  other  hand,  no  man  should  re- 
gard the  fruits  of  industry  as  wholly  his  own,  but 
should  share  with  his  neighbor  in  the  spirit  of 
true  brotherhood  and  friendliness.  According 
to  Saint  Thomas,  all  property  belongs  to  God, 
and  should  be  held  as  a  trust  for  the  glory  of  God 
and  the  good  of  man. 

Modern  Christian  socialists  have  not  gone  far 
beyond  the  teachings  of  Saint  Thomas,  except  in 


28  THE  SECTS  OF  SOCIALISM 

their  application  to  present  conditions.  They 
usually  favor  reasonable  labor  legislation,  living 
wages,  and  harmony  between  employer  and  em- 
ployee based  on  mutual  good  will  and  fair  play. 
In  other  words,  they  are  social  reformers  rather 
than  socialists,  placing  the  emphasis  upon  char- 
acter rather  than  material  environment,  though 
recognizing  the  importance  of  both. 

The  followers  of  Marx  do  not  conceal  their 
contempt  for  Christian  socialism.  In  fact,  they 
are  usually  against  the  Church,  and  many,  if  not 
most,  are  also  anti-Christian.  In  the  Com- 
munist Manifesto  Marx  said:  "Nothing  is  easier 
than  to  give  Christian  asceticism  a  socialist  tinge. 
Christian  socialism  is  but  the  holy  water  with 
which  the  priest  consecrates  the  heart-burnings 
of  the  aristocrat."  1 

The  great  German  socialist,  August  Bebel,  is 
even  more  outspoken,  thus:  "We  aim  in  the  do- 
main of  politics  at  republicanism;  in  the  domain 
of  economics  at  socialism;  and  in  the  domain  of 
what  is  to-day  called  religion  at  atheism."  2 

The  well-known  English  socialist,  Belfort 
Bax,  designated  the  religion  of  socialism  as 
"atheistic  humanism";  and  another  great  Eng- 
lish socialist,  H.  M.  Hyndman,  said:  "Christi- 
anity is  anarchism,  not  socialism;"  and  again: 

1  Manifesto  of  the  Communist  Party,  by  Karl  Marx  and  Fred- 
erick Engels,  p.  45.      (Ed.  Kerr  &  Co.) 

2  Towler  and  Ray,  Socialism,  Its  Promise  and  Failure,  p.  73. 


THE  SECTS  OF  SOCIALISM  29 

"Socialism  is  the  only  religion  left;  Christianity 
is  practically  dead!" 

The  question  is  well  summed  up  by  Professor 
Robert  Flint,  thus:  "What  is  called  Christian 
socialism  will  always  be  found  either  un-Chris- 
tian  in  so  far  as  it  is  socialistic,  or  un-socialistic 
in  so  far  as  it  is  truly  and  fully  Christian." 

Fabian  Socialism. — Fabian  socialism  is  an 
English  variety,  deriving  its  inspiration  from 
Marxism,  but  more  evolutionary  than  revolution- 
ary in  character.  The  Fabian  Society  was 
founded  in  the  year  1884  by  a  number  of  lit- 
erary people,  and  has  had  among  its  members 
some  notable  men  and  women,  including  Mr.  and 
Mrs.  Sidney  Webb,  G.  Bernard  Shaw,  Frank 
Podmore,  Annie  Besant  and  H.  G.  Wells — some 
of  whom  have  since  wandered  rather  far  from 
the  fold.  The  name  chosen  alluded  to  the  cele- 
brated Roman  general,  Fabius  Maximus,  called 
the  "Delayer,"  who,  in  the  war  with  Hannibal, 
chose  to  retreat  and  avoid  battle  in  the  hope  of 
wearing  down  the  enemy  until  he  could  strike 
and  strike  hard. 

The  Fabians,  questioning  some  of  the  Marx- 
ian theories,  and  doubting  the  wisdom  of  Marx- 
ian tactics,  believe  that  socialism  will  come 
through  compromise  as  well  as  struggle,  even  as 

iTowler  and  Ray,  Socialism,  Its  Promise  and  Failure,  p.  218, 
2  Robert  Flint,  Socialism,  p.  441. 


30  THE  SECTS  OF  SOCIALISM 

the  British  constitution  has  grown,  little  by  little, 
to  the  model  of  democratic  government.  They 
wish  to  work  through  the  regular  political  par- 
ties, obtaining  what  concession  they  can,  and 
spreading  socialist  doctrines  by  "peaceful  pene- 
tration." 

The  Fabians  hope  to  bring  about  socialism  by 
the  gradual  extension  of  municipal  and  national 
activity,  until  all  of  the  land  and  most  of  the 
nation's  capital  shall  be  owned  and  managed  by 
the  state  through  highly  trained  and  competent 
civil  servants.  Fabianism,  therefore,  is  state 
socialism,  as  conceived  by  a  group  of  English 
"intellectuals"  who  believe  that  socialism  will 
come  gradually  and  peacefully,  and  that  they,  or 
their  kind,  will  be  able,  before  and  after  the  revo- 
lution, to  keep  the  unleashed  proletariat  well  in 
hand. 

State  Socialism. — State  socialism  is  of  Prus- 
sian origin,  although,  like  Marx  himself,  it  has 
found  a  home  in  England.  According  to  this 
way  of  thinking  society  is  to  be  so  organized  that 
all  or  nearly  all  business  will  be  carried  on  by  the 
state — that  is  to  say,  by  the  local,  state,  or  na- 
tional government,  as  the  case  may  be. 

Most  socialists  deny  that  they  favor  state 
socialism,  but  that  is  because  they  think  of  the 
state  as  an  undemocratic,  exploiting  minority — 
the  capitalist  state.  When,  therefore,  they  find  a 


THE  SECTS  OF  SOCIALISM  31 

country  like  New  Zealand,  owning  and  operat- 
ing the  railways,  the  telegraph  and  telephone 
lines,  carrying  on  the  business  of  insurance,  coal 
mining,  the  fixing  of  wages,  and  many  other 
activities  usually  left  to  private  enterprise — they 
are  inclined  to  suspect  and  condemn  this  sort  of 
thing,  because,  as  they  say,  that  state  is  still  in 
the  hands  of  the  capitalist  class  and  the  civil 
servants  appointed  by  them. 

W.  E.  Walling  says  that  this  is  not  state  so- 
cialism at  all,  but  "state  capitalism;"  and  Hilaire 
Belloc  believes  that  the  final  outcome  of  that 
would  be  a  new  and  unbearable  form  of  tyranny, 
which  he  well  names  the  "Servile  State." 

But  when,  in  the  revolution,  the  working  class 
seize  the  political  power,  and  the  capitalist  state 
"dies  out,"  as  Engels  says,  it  must  be  replaced 
by  the  organized  workers,  the  new  government — 
the  socialist  state.  And  in  so  far  as  the  socialist 
government,  whether  central  or  local,  carries  on 
business  affairs  by  public  authority,  there  will  be 
a  greater  or  less  degree  of  state  socialism. 

Socialists  are  usually  very  chary  about  de- 
scribing the  probable  activities  of  the  socialist 
state,  not  knowing  what  the  workers  will  do  after 
the  revolution,  and  fearing  to  indulge  in  Utopian 
prediction.  Yet  some  consideration  of  the  sub- 
ject is  forced  upon  them,  otherwise  they  must 


32  THE  SECTS  OF  SOCIALISM 

stand  convicted  of  wishing  to  take  a  leap  in  the 
dark. 

State  socialists,  at  least,  have  a  rather  definite 
idea  in  mind — the  collective  ownership  and  op- 
eration of  all  the  means  of  production  under  the 
direction  of  public  authority,  local,  state,  or  na- 
tional, according  to  the  nature  of  the  industry  and 
other  circumstances.  Naturally,  the  local  gov- 
ernment bodies  would  take  over  local  industries, 
and  the  national  authorities  would  manage  those 
of  national  size  and  scope,  as  they  do  now  to 
some  extent.  State  socialism  involves  merely 
the  extension  of  present  governmental  activities 
until  practically  all  business  shall  be  carried  on 
by  public  authority,  that  is  to  say,  by  the  state. 

Then  most  workers  would  be  civil  servants 
attached  to  the  local,  state,  or  national  govern- 
ments. Also,  inasmuch  as  business  activities  are 
closely  related  and  tied  together,  there  would 
necessarily  be  a  strong  and  highly  centralized 
national  government  to  which  the  local  authori- 
ties would  be  subordinate — otherwise  there  would 
be  conflict,  disunion,  and  anarchy.  For  the  same 
reason,  the  central  government  must  have  the 
power  to  tax,  to  draft  men  for  the  army  and 
navy,  and  to  draft  workers  for  the  industrial 
army. 

As  to  the  way  of  electing  the  officials  of  the  so- 
cialist state,  there  is  much  difference  of  opinion; 


THE  SECTS  OF  SOCIALISM  33 

but,  as  Hillquit  says — it  is  usually  held  that  they 
will  not  be  elected  by  general  popular  vote,  but 
will  be  chosen  by  the  members  of  each  trade  or 
calling.1  However  that  may  be,  the  very  idea  of 
state  socialism  carries  with  it  the  thought  of  a 
vast  bureaucracy  of  higher  and  lower  civil  ser- 
vants, with  departments,  divisions  and  subdi- 
visions, chiefs  and  subordinate  officers,  and  a 
great  multitude  of  the  rank  and  file  whose  place 
and  work  would  be  assigned  to  them  by  authority 
over  which  they  would  have  little  or  no  control. 

It  is  hard  to  imagine  and  unsafe  to  predict  in 
such  matters,  but  the  more  one  thinks  of  state 
socialism  the  less  attractive  it  seems,  until  its 
democratic  features  fade  away,  and  it  takes  the 
appearance  of  incompetent  and  insufferable  tyr- 
anny. Many  socialists,  seeing  this,  are  alarmed 
and  disconcerted,  and  frequently  turn  to  the 
opposite  extreme  of  syndicalism  and  anarchism. 

Syndicalism. — Syndicalism,  or  revolutionary 
unionism,  arose  in  France  as  a  reaction  against 
the  Prussian  conception  of  state  socialism  and 
the  political  methods  connected  therewith.  It 
got  its  name  from  the  syndicates,  or  labor  unions, 
especially  those  composing  the  General  Federa- 
tion of  Labor,  the  "C.  G.  T.,"  formed  in  1895. 
It  derived  its  inspiration  from  the  revolutionary 
traditions  of  France,  the  writings  of  French 

i  Morris  Hillquit,  Socialism  in  Theory  and  Practice,  p.  142. 


THE  SECTS  OF  SOCIALISM 


socialists,  and  the  activities  of  the  trade  unions. 

Trade  unionists  in  France,  as  in  other  coun- 
tries, constitute  a  minority  of  the  working  class, 
and  those  who  favored  socialism  naturally  de- 
spaired of  obtaining  it  by  political  methods. 
Also,  they  resented  the  leadership  of  the  "intel- 
lectuals," who,  like  Millerand,  frequently  lost 
their  revolutionary  faith  and  fervor,  and  went 
over  to  the  bourgeois  parties.  Then,  too,  they 
distrusted  the  intellectuals  as  mere  theorists 
and  mild-mannered  gentlemanly  socialists,  who 
shrunk  from  violence  and  opposed  revolution  by 
insurrection. 

Political  methods  were  too  slow  and  compli- 
cated for  the  revolutionary  unionists  of  France, 
who,  preferring  to  play  their  own  game,  insisted 
that  more  could  be  accomplished  by  "direct 
action"  —  sabotage,  the  boycott,  the  union  label, 
the  general  strike  —  which,  if  repeatedly  practised 
by  the  united  working  class,  would  soon  bring  the 
capitalists  to  their  knees. 

Sabotage.  —  Sabotage  is  soldiering,  going  easy, 
doing  bad  work,  spoiling  materials  and  machin- 
ery, "striking  on  the  job,"  and  trying  in  every 
way  to  make  it  impossible  for  the  employer  to 
carry  on  business. 

Boycotting  is  a  concerted  refusal  to  deal  with 
an  offending  employer,  especially  refusing  to 
buy  his  goods.  The  union  label  is  a  sort  of  nega- 


THE  SECTS  OF  SOCIALISM  35 

tive  boycott,  for  unionists  are  advised  to  buy  no 
goods  except  those  declared  "fair"  by  the  label 
attached  to  them. 

The  General  Strike. — All  of  these  are  more  or 
less  powerful  weapons  of  union  labor,  but  the 
general  strike  is  the  most  formidable  of  all,  the 
most  perfect  expression  of  the  solidarity  of  the 
working  class.  Realizing  the  futility  of  local  and 
occasional  strikes,  the  syndicalists  wish  to  bring 
about,  on  call,  a  complete  cessation  of  work, 
which  would,  they  believe,  paralyze  industry, 
ruin  the  employers,  make  the  working  class  su- 
preme, and  usher  in  the  social  revolution. 

The  general  strike  is  a  universal  sympathetic 
strike,  and  would,  if  carried  out  according  to  the 
intention,  be  most  disastrous  to  any  country,  es- 
pecially to  those  having  large  cities  dependent  on 
the  continuous  operation  of  industry  for  all  the 
necessaries  of  life. 

However,  the  general  strike,  like  the  tradi- 
tional boomerang,  is  a  dangerous  weapon  for  the 
working  class  to  use,  as  it  would  probably  do 
more  harm  to  them  than  to  the  capitalists  against 
whom  it  might  be  directed.  Also,  it  would  be 
foolish  for  the  workers  to  use  it  as,  if  they  were 
in  the  minority,  it  would  fail;  and  if  they  were 
in  the  majority,  they  could  attain  their  ends  by 
political  means  and  set  up  socialism  at  any  time. 
For  all  that,  the  syndicalists  expect  to  use  their 


36  THE  SECTS  OF  SOCIALISM 

terrible  weapon  when  the  time  comes  and  believe 
that  it  will  bring  about  the  desired  results. 

After  the  revolution,  the  syndicalists  think,  the 
unions,  with  their  federations,  will  remain  as  the 
structure  and  organization  of  industrial  society; 
so  there  will  be  no.  radical  change  in  the  economic 
system,  but  only  a  transfer  of  control.  The  ideal 
society,  then,  as  Levine  puts  it,  is  not  a  scheme  or 
a  utopia,  but  something  gradually  evolved  by  the 
unionist  movement,  and  prepared  by  the  social 
struggles  of  to-day. 

The  Industrial  Union. — The  trade  union  or- 
ganization is,  of  course,  not  a  scheme  or  utopia, 
because  it  exists  to-day  as  a  part  of  the  industrial 
system ;  but  the  assumption  that  the  structure  of 
future  society  will  be  along  the  same  lines  would 
be  decidedly  Utopian  if  it  were  not  so  lacking  in 
imagination. 

At  any  rate,  the  syndicalists,  in  view  of  recent 
economic  development,  especially  in  America, 
have  been  obliged  to  change  their  views.  Instead 
of  making  the  trade  union  the  basic  unit  of  the 
collective  commonwealth  they  now  say  that  the 
industrial  union  will  be  the  primary  organization, 
with  local  chapters  and  trade  unions  subordinate 
to  it — much  as  now. 

If  this  prophecy  is  fulfilled,  the  farm  laborers 
will  manage  the  farms,  the  miners  the  mines,  the 
railway  employees  the  railways,  the  steel  workers 


THE  SECTS  OF  SOCIALISM  37 

the  steel  business,  the  sailors  and  dock  laborers 
the  shipping,  the  factory  hands  the  factory,  the 
wholesale  and  retail  clerks  the  business  of 
merchandising — and  so  on.  To  quote  Levine  ; 
again:  "Their  idea  is  to  transform  society  into 
a  federation  of  self-governing  productive  groups 
working  together  for  the  benefit  of  all  with  in- 
struments belonging  to  society  as  a  whole  and 
under  the  supreme  control  of  the  community."  l 

Just  how  the  community  would  exercise  this 
supreme  control,  especially  in  case  of  conflict  be- 
tween the  productive  groups,  the  syndicalists  do 
not  clearly  explain.  Indeed,  the  problem  is  for 
them  very  difficult,  if  not  quite  unsolvable.  If 
all  power  is  to  belong  to  the  industrial  unions,  the 
results  will  be  nothing  short  of  anarchy.  If,  on 
the  other  hand,  the  community  is  to  be  really 
supreme,  it  will  involve  a  high  degree  of  central- 
ization and  state  socialism.  Between  these  ex- 
tremes the  syndicalist  has  great  trouble  in  find- 
ing the  golden  mean.  But  the  traditions  and 
sympathies  of  the  syndicalists  lean  strongly  to- 
ward decentralization  and  anarchy. 

The  I.  W.  W.—The  Industrial  Workers  of 
the  World  are  American  syndicalists.  The  or- 
ganization was  formed  in  Chicago  in  the  year 
1905  by  a  group  of  insurgent  unionists,  social- 

i  Syndicalism,    Louis   Levine,    North   American   Review,   July, 
1919. 


38  THE  SECTS  OF  SOCIALISM 

ists  and  anarchists,  including  W.  D.  Haywood, 
C.  H.  Moyer,  W.  E.  Trautman,  C.  O.  Sherman, 
Daniel  De  Leon  (Loeb),  A.  M.  Simons,  Eugene 
V.  Debs,  Ernest  Untermann,  Vincent  St.  John, 
"Father"  Thomas  Hagerty  and  "Mother"  Mary 
Jones. 

The  original  idea  was  to  have  a  double-bar- 
reled organization  which  should  carry  on  the 
class  struggle  along  both  political  and  industrial 
lines.  There  was  to  be  one  great  industrial  union 
with  subdivisions  representing  national  and  inter- 
national industries  and  crafts.  This  was  intend- 
ed, evidently,  to  supersede  the  American  Federa- 
tion of  Labor  in  the  industrial  sphere,  and  the 
socialist  parties  in  the  political  field. 

The  socialistic  character  of  the  organization  is 
clearly  seen  in  the  preamble  to  the  constitution, 
which  reads,  in  part,  as  follows:  "The  working 
class  and  the  employing  class  have  nothing  in 
common.  .  .  .  Between  these  two  classes  a 
struggle  must  go  on  until  all  the  toilers  come  to- 
gether on  the  political  as  well  as  the  industrial 
field,  and  take  and  hold  that  which  they  produce 
by  their  labor,  through  an  economic  organization 
of  the  working  class,  without  affiliation  with  any 
political  party."  * 

The  direct  actionist  in  the  I.  W.  W.  presently 

iPaul   Brissenden,  The  Launching  of  the  Industrial  Workers 
of  the  World,  p.  46. 


THE  SECTS  OF  SOCIALISM  39 

antagonized  the  more  conservative  socialists,  like 
A.  M.  Simons,  and  before  long  got  rid  of  De 
Leon  and  other  socialists  of  the  left  wing  also, 
who  seceded  and  formed  the  Detroit,  or  "yellow" 
I.  W.  W.,  later  known  as  the  Workers'  Inter- 
national Industrial  Union.  The  Chicago,  or 
"red"  I.  W.  W.,  is  now  a  syndicalist  or  semi- 
anarchist  organization  opposed  to  political  ac- 
tion, favoring  sabotage,  the  general  strike,  and 
other  forms  of  direct  action,  and  standing  strong- 
ly for  industrial  as  opposed  to  craft  unionism. 

Formerly,  they  attacked  the  American  Feder- 
ation of  Labor  from  without,  but  of  late  years 
some  of  their  leaders,  like  Wm.  Z.  Foster,  have 
joined  the  regular  unions  for  the  purpose  of 
"boring  from  within"  and  gradually  converting 
them  to  socialist  principles  and  tactics. 

Guild  Socialism. — Guild  socialism  is  a  typical- 
ly English  compromise  between  syndicalism  and 
state  socialism.  It  is  in  part  an  academic  and 
Utopian  scheme  of  ideal  society,  in  part  a  shrewd 
guess  or  prophecy,  based  on  the  supposed  trend 
of  political  and  industrial  events. 

The  argument  runs  about  as  follows :  We  have 
in  every  country  two  sets  of  powers :  the  political, 
based  on  geographical  or  sectional  lines,  and  the 
economic,  resting  on  industrial  divisions  under- 
lying and  crossing  the  geographical.  Therefore, 
we  have  a  parliament  or  congress,  elected  by 


40  THE  SECTS  OF  SOCIALISM 

states  and  districts,  and  an  invisible  industrial 
power  or  set  of  powers  behind  the  scene,  influenc- 
ing and  even  controlling  the  political.  These  are 
the  dark  forces  moving  mysteriously  in  the  back- 
ground, about  which  Veblen  has  so  much  to  say. 

Why  not,  says  the  national  guildsman,  recog- 
nize the  dual  character  of  our  government  and 
freely  admit  that  the  industries  of  the  country 
are  as  much  entitled  to  representation  in  congress 
as  the  geographical  or  regional  divisions?  Let 
all  the  industries .  be  federated  into  national 
guilds  and  let  the  guilds  elect  a  guild  congress 
which  shall  have  control  over  the  organization  of 
production  and  related  matters.  Then  let  there 
be  a  regional  congress,  as  now,  representing  the 
people  as  a  whole,  especially  in  their  capacity  as 
consumers  or  users  of  goods  and  services. 

According  to  this  arrangement,  the  guild  con- 
gress, through  the  national  guilds,  will  attend  to 
production;  and  the  other  congress,  presumably 
the  supreme  power,  will  see  to  it  that  the  people 
are  not  robbed  by  particular  guilds,  and  that  the 
guilds  do  not  quarrel  too  much  with  one  another. 
All  this  will  involve  the  fixing  of  wages  and 
prices,  equalization  by  taxation,  and  all  the  other 
features  of  state  ownership  and  control. 

Mr.  G.  D.  H.  Cole,  one  of  the  leading  apostles 
of  this  movement,  says:  "The  National  Guilds- 
man believes  that  industry  ought  to  be  controlled 


THE  SECTS  OF  SOCIALISM  41 

by  the  workers  engaged  in  it;  but  he  believes  also 
that  the  State  ought  to  own  industry,  and  that 
popular  control  must  be  established  over  the 
machinery  of  State"  * 

Here  Mr.  Cole  lets  the  cat  out  of  the  bag  and, 
when  free  from  its  syndicalistic  and  anarchistic 
disguise,  guild  socialism  appears  in  its  proper 
shape  as  Fabian  State  Socialism. 

Guild  socialism  appeals  strongly  to  many 
people,  not  so  much  because  they  favor  socialism, 
as  because  they  feel  that  the  manufacturing  and 
commercial  interests  of  the  country,  the  trade 
unions,  churches,  charitable  societies,  and  the  like, 
should  have  direct  and  acknowledged  represen- 
tation in  Congress,  and  not  be  obliged,  as  now, 
to  hover  in  the  background,  trying  to  persuade 
the  representatives  of  the  people  that  theirs  is 
the  only  point  of  view. 

Perhaps  it  would  be  well  to  bring  the  so-called 
"dark  forces"  out  into  the  open  light  of  day, 
although  it  must  be  clearly  understood,  as  in  the 
national  guildsmen's  scheme,  that  the  regional 
congress,  representing  the  people  as  a  whole, 
must  be  supreme.  Apart  from  that,  the  pro- 
posed national  guilds  are  not  very  different,  in 
form  and  function,  from  the  Russian  Soviets. 

Bolshevism. — Bolshevism  is  an  outgrowth  of 
the  Russian  Social  Democratic  Party,  which  in 

i  G.  D.  H.  Cole,  Guild  Socialism,  "Living  Age,"  July  26,  1919. 


42  THE  SECTS  OF  SOCIALISM 

the  year  1903,  split  into  two  branches:  the  Bol- 
sheviki  (meaning  the  majority)  and  the  Menshi- 
viki  (meaning  the  minority).  The  Bolsheviki, 
who  were  really  in  the  minority  from  the  revolu- 
tion of  1905  to  that  of  1917,  were  the  more  radi- 
cal group  and  held  that  Russia  could  have  social- 
ism without  first  passing  through  the  industrial 
stage — could  leap  over  the  wall,  as  it  were,  with- 
out going  through  the  gate  of  capitalism. 

The  Menshiviki,  on  the  contrary,  many  of 
whom  were  "intellectuals,"  held  to  the  typical 
Marxian  view  that  Russia,  or  any  other  country, 
must  pass  through  the  preparatory  stage  of  cap- 
italism before  it  would  be  "ripe"  for  the  revolu- 
tion, and  that  a  premature  revolution  would 
perish  like  an  untimely  birth. 

After  the  revolution  of  March,  1917,  the  in- 
fluence of  the  Bolsheviki  in  the  army  and  in  the 
Petrograd  Soviets  constantly  increased,  until,  on 
November  7,  they  seized  the  reins  of  government, 
and,  under  the  leadership  of  Lenin  and  Trotzky, 
they  set  up  the  soviet  government,  or  the  "dicta- 
torship of  the  proletariat." 

Since  that  time  a  bitter  dispute  has  been  going 
on  between  the  moderate  socialists  and  the  Bol- 
shevik revolutionists  as  to  which  are  the  true  and 
orthodox  followers  of  Marx.  The  Bolsheviki 
regard  the  moderates  as  reactionaries,  and  perse- 
cute them  as  traitors  to  the  revolution. 


THE  SECTS  OF  SOCIALISM  43 

The  moderate  socialists,  on  the  other  hand,  re- 
gard the  Bolsheviki  as  dangerous  heretics,  car- 
ried away  by  revolutionary  fervor.  Their  chief 
error  lies  in  thinking  a  permanent  revolution 
possible  in  Russia  at  the  present  time;  but  they 
are  also  accused  of  denying  democracy  in  that 
they  have  dissolved  the  Constituent  Assembly, 
suppressed  freedom  of  the  press  and  free  speech, 
persecuted  their  socialist  comrades,  and,  finally, 
set  up  a  dictatorship  of  the  proletariat  different 
from  the  Marxian  model.  The  moderates  say 
that  the  Bolsheviki  are  the  true  reactionaries,  be- 
cause they  have  brought  ruin  to  their  country 
and  indefinitely  postponed  the  coming  of  real, 
permanent,  successful  socialism. 

Marx  a  Dual  Personality. — It  is  interesting 
to  find  the  pot  calling  the  kettle  black,  as  the  con- 
spirators blame  one  another  for  the  failure  of 
their  plans.  As  to  their  spiritual  father,  Marx, 
the  truth  is  that  he  was  a  dual  personality,  whose 
writings  are  both  evolutionary  and  revolution- 
ary, and  are  susceptible  of  diverse  and  even 
contradictory  interpretation,  according  to  the 
disposition  and  purpose  of  his  readers.  As  Mo- 
hammedans of  every  sect  appeal  to  the  Koran, 
so  socialists  of  every  faction  find  texts  in  Marx, 
with  or  without  the  context,  to  support  their 
views. 

For  example,  in  the   "Critique   of  Political 


44  THE  SECTS  OF  SOCIALISM 

Economy,"  published  in  1859,  M,arx  affirms? 
"No  social  order  ever  disappears  before  all  the 
productive  forces  for  which  there  is  room  in  it 
have  been  developed;  and  new  and  higher  rela- 
tions of  production  never  appear  before  the 
material  conditions  of  their  existence  have  ma- 
tured in  the  womb  of  the  old  society."  * 

The  Communist  Manifesto,  on  the  other  hand, 
published  in  1848,  breathes  the  spirit  of  conspir- 
acy for  a  violent  and  sudden  revolution;  and  in 
the  Neue  Rheinische  Zeitung,  in  the  year  1849, 
he  wrote:  "When  our  time  comes,  revolutionary 
terrorism  will  not  be  sugar-coated.  .  .  .  There 
is  but  one  way  of  simplifying,  shortening,  con- 
centrating the  death  agony  of  the  old  society,  as 
the  bloody  labor  of  the  new  world's  birth — revo- 
lutionary terror."  2 

The  Bolsheviki,  then,  may  be  taken  to  repre- 
sent the  earlier  and  more  revolutionary  form  of 
Marxian  doctrine,  while  the  moderate  socialists 
represent  the  later  and  saner  Marx,  who  had 
toned  down  and  even  repudiated  some  of  his 
former  teachings.  Once  he  said,  half  in  jest:  "I 
am  not  a  Marxist."  It  is  no  wonder,  then,  that 
there  are  Marxists  and  Marxists  of  numerous 
factions,  all  taking  from  Marx  what  suits  them, 

iA  Contribution  to  the  Critique  of  Political  Economy.  Au- 
thor's Preface. 

2Cf.  V.  G.  Simkhovitch,  Marxism  versus  Socialism,  p.  194. 


THE  SECTS  or  SOCIALISM  45 

and  rejecting  and  even  denouncing  what  they  do 
not  like. 

Notwithstanding  all  that  the  moderate  social- 
ists have  said  in  repudiation  of  the  Bolsheviki, 
there  can  be  no  doubt  that  Professor  Ely  is  right 
in  saying:  "There  is  no  mystery  about  the  nature 
or  the  intellectual  authority  of  Bolshevism.  It 
is  simply  Marxian  socialism,  as  Lenine  and  his 
associates  have  told  us  innumerable  times."  * 

Comrmmism. — Communism,  as  the  name  im- 
plies, is  opposed  to  private  ownership  of  prop- 
erty, holding  that  practically  all  property  should 
belong  to  the  community  and  be  administered  for 
the  good  of  all,  whereas  the  more  moderate  social- 
ists favor  the  socialization  of  capital  only,  leav- 
ing personal  property  in  private  hands.  Com- 
munism is  the  extreme  form  of  socialism,  but 
there  is  also  a  form  of  anarchism  known  as  com- 
munist-anarchism, which  includes  most  of  the 
anarchists. 

Socialists  usually  object  to  being  called  com- 
munists, but  it  is  noteworthy  that  Marx  and  his 
associates  called  themselves  communists,  that  the 
Bolsheviki  of  Russia,  the  Spartacans  of  Ger- 
many, and  many  radicals  in  the  United  States 
and  other  countries  call  themselves  by  that  name. 

The  first  use  of  the  word  "socialism"  in  Eng- 

iR.  T.  Ely,  "What  is  Bolshevism?"  "Review  of  Reviews," 
November,  1920. 


46  THE  SECTS  OF  SOCIALISM 

lish  is  found  in  the  Poor  Man's  Guardian  in  1833, 
after  which  it  was  commonly  used  to  designate 
the  followers  of  Owen  and  Fourier.  The  word 
"communism"  is  said  to  have  been  first  used  in 
Paris  in  the  year  1840  as  applied  to  the  follow- 
ers of  Babeuf,  then  called  "equalitarians."  In 
the  Communist  Manifesto  of  1848,  Marx  and 
Engels  apply  both  names  to  their  predecessors, 
but  seem  to  have  preferred  to  call  themselves 
communists. 

Later  the  word  socialism  became  more  popu- 
lar, perhaps  because  of  its  milder  meaning,  while 
the  word  communism  was  applied  to  extreme 
socialism  and  to  those  socialists  who,  like  Owen 
and  Fourier,  favored  the  trying  of  collectivism  in 
small  experimental  communities  before  launch- 
ing it  on  a  national  or  international  scale.  Now, 
however,  socialists  of  the  extreme  left  every- 
where call  themselves  communists,  and  there  can 
be  no  doubt  that  most  forms  of  socialism  have  a 
strong  leaning  toward  communism. 

Anarchism. — Anarchism  is  the  name  given  to 
the  theory  that  all  governments  are  wrong  and 
unnecessary.  Anarchism  is  extreme  individual- 
ism, and  its  advocates  are  bitterly  opposed  to  the 
forcible  control  of  man  by  man,  whether  by  gov- 
ernment or  by  the  power  of  property. 

The  anarchist-communists,  who  are  the  most 
common  kind  of  anarchists,  especially  in  Russia, 


THE  SECTS  OF  SOCIALISM  47 

would  abolish  the  State  and  all  forms  of  private 
property.  In  place  of  the  State  they  would 
have  voluntary  associations,  and  even  federations 
of  associations,  but  with  no  compulsory  powers. 
People  could  be  trusted  to  act  wisely  and  to  do 
right  because  man  is  by  nature  a  rational  and 
moral  animal. 

As  to  work  and  production,  there  is  to  be  no 
compulsion ;  but  most  anarchists,  like  Kropotkin, 
believe  that  it  could  be  made  pleasant  and  desira- 
ble. Property  is  to  belong  to  the  community,  the 
members  of  which  may  take  such  goods  and  ser- 
vices as  they  can  use.  "From  every  one  accord- 
ing to  his  ability;  to  every  one  according  to  his 
needs." 

Socialists  say  that  they  have  little  in  common 
with  anarchists,  but  this  is  not  altogether  true. 
Not  only  do  they  agree  in  their  condemnation  of 
capitalism,  but  in  their  thought  of  the  ideal  so- 
ciety they  are  not  so  far  apart  as  may  appear.  Of 
course,  state  socialism  and  anarchism  are  as  far 
apart  as  the  poles. 

At  any  rate,  many  socialists  and  all  syndical- 
ists abhor  state  socialism,  and  would  organize 
society  on  the  basis  of  unions,  guilds,  Soviets  or 
other  associations,  with  a  maximum  of  voluntary 
cooperation  and  a  minimum  of  state  control. 
There  are  strong  anarchistic  tendencies  in  social- 
ism, which  make  it  hard  to  tell,  in  the  examina- 


48  THE  SECTS  OF  SOCIALISM 

tion  of  ideals,  where  socialism  ends  and  anarch- 
ism begins.  Anarchism  is  the  despair  of 
socialists,  but  state  socialism  is  their  nightmare. 

Socialism  Different  in  Every  Country. — So- 
cialism or  collectivism — for  the  words  have  the 
same  meaning — is  a  religion  of  many  sects,  but 
when  all  of  them  are  mentioned  and  described, 
the  story  is  only  half  told.  Socialism  is  different 
in  every  different  country,  according  to  racial 
temperament,  national  ways  of  thinking,  person- 
al peculiarities,  economic  conditions,  and  all  that. 

In  Germany  there  is  a  leaning  toward  state 
socialism  of  the  Prussian  type.  In  France  social- 
ism is  revolutionary,  idealistic,  and  anarchistic. 
In  England  it  is  cautious,  compromising,  and  ex- 
perimental. In  Belgium  it  is  largely  co-opera- 
tive. In  Spain  and  Italy  it  is  extreme  .and 
violent.  In  Russia  it  is  revolutionary,  visionary, 
and  anarchistic,  although  the  Soviet  government 
is  a  centralized  dictatorship  resembling  state 
socialism. 

The  varieties  of  socialism  in  every  country  are 
numerous  and  perplexing,  with  a  tendency  to 
divide  and  subdivide  on  slight  provocation.  In 
Russia,  for  example,  there  were  before  the  revo- 
lution two  main  divisions,  the  Social  Democrats 
and  the  Socialist  Revolutionists,  each  split  into 
several  sections.  Of  the  Social  Democrats  there 
were  the  Bolsheviki  and  the  Mensheviki,  the  lat- 


THE  SECTS  OF  SOCIALISM  49 

ter  being  in  two  groups,  the  Nationalists  and  the 
Internationalists.  Trotzky  was  formerly  an 
International  Menshevik.  There  were  also  the 
Unified  Social  Democrats  and  the  Populist 
Socialists. 

Similarly,  the  Socialist  Revolutionists,  orig- 
inally a  peasants'  party,  were  divided  into  the 
Right,  the  Center,  and  the  Left.  Kerencky  was 
a  Socialist  Revolutionist  of  the  Right,  or  conserv- 
ative wing.  Katherine  Breshkovskaya  was  a 
Revolutionist  of  the  Left,  or  extreme  wing,  ad- 
vocating violence  and  terror.  Strange  to  say,  the 
"Grandmother  of  the  Revolution"  refuses  to  ac- 
knowledge her  grandchildren,  the  Bolsheviki. 

American  Socialist  Parties. — In  the  United 
States  there  were  formerly  two  main  socialist 
parties — the  Socialist  Labor  Party  (1877-)  and 
the  Social  Democratic  Party  (1898-),  later 
merged  in  the  Socialist  Party  (1901-),  now  by 
far  the  larger  body.  The  war  caused  a  split  in 
the  Socialist  Party,  the  pro-war  minority  resign- 
ing and  forming  the  Social  Democratic  League. 
In  1919  the  Socialist  Party  again  split  into  two 
parts — the  Left  Wing  forming  itself  into  the 
Communist  Party.  Presently  this  gave  birth  to 
the  Communist  Labor  Party,  after  which  both 
parent  and  child  became  affiliated  with  the  Mos- 
cow or  Third  International.  The  Socialist  Party 
also  has  leaned  toward  the  Soviet  government, 


50  THE  SECTS  OF  SOCIALISM 

especially  since  it  lost  its  best  "intellectuals,"  in- 
cluding Spargo,  Walling,  Ghent,  Stokes  and 
Russell,  but  of  late  it  has  lost  most  of  its  enthu- 
siasm because  of  the  intolerance  of  the  Moscow 
International. 

In  addition  to  these  groups,  which  might 
change  at  any  time,  are  the  I.  W.  W.,  represent- 
ing American  Syndicalism;  the  Nonpartisan 
League,1  inclining  toward  state  socialism  or 
state  capitalism;  the  National  Labor  Party 
( 1919- ),  representing  insurgent  or  socialistic 
unionism;  and  the  Farmer-Labor  Party  (1920), 
a  semi-socialistic  alliance  of  the  National  Labor 
Party  with  several  other  radical  groups. 

It  would  be  possible  to  give  a  similar  list  of  so- 
cialist factions  in  every  country,  which  would 
merely  serve  to  emphasize  the  unscientific  char- 
acter of  "scientific"  socialism.  With  all  their 
pretensions  to  scientific  spirit,  method  and  re- 
sults, the  socialists'  stock  in  trade  consists 
chiefly  of  intemperate  criticism  of  things  as  they 
are,  and  a  glowing  description  of  the  future 
world  as  they  see  it  in  their  dreams. 

i  See  Appendix. 


Ill 


THE  ECONOMIC  INTERPRETATION 
OF  HISTORY 

What  student  of  history  has  not  felt  the  need 
of  an  interpreter?  History  is  frequently  little 
more  than  a  chronicle  of  events  that  follow  one 
another  like  moving  pictures,  operated  by  ma- 
chinery that  we  do  not  see,  controlled  by  motives 
that  we  cannot  understand.  Karl  Marx,  with 
his  materialistic  or  economic  interpretation,  pro- 
fesses to  admit  us  behind  the  scenes,  where  we 
may  get  a  glimpse  of  the  power  that  runs  the 
show,  and  understand  the  moving  principle  of 
social  evolution. 

But  why  should  the  procession  of  the  ages  be 
intelligible  to  man?  Evidently,  says  the  philoso- 
pher Hegel,  because  the  world  itself  is  the  ex- 
pression of  that  reason  which  is  the  essence  and 
soul  of  it.  The  mind  of  man  is  the  reflection  or 
counterpart  of  universal  reason.  Man  is  the 
measure  of  all  things,  because  he  was  made  in 
the  image  of  God — the  absolute.  History  is  the 
unfolding  of  the  divine  thought  in  the  world, 
which  man  can  understand  because  his  own 
thought  develops  in  the  same  way. 

51 


52  ECONOMIC  INTERPRETATION  OF  HISTORY 

Logic,  with  Hegel,  is  the  universal  science,  for 
the  process  of  thought  is  the  process  of  evolution. 
Thought  advances  by  a  series  of  denials,  strug- 
gles and  compromises.  We  discover  a  truth, 
and  then  another  truth  so  different  that  it  seems 
to  contradict  and  quarrel  with  the  former. 
Presently,  getting  more  knowledge,  we  see  that 
both  are  opposite  sides  of  a  larger  whole.  Then 
the  new  principle  guides  us  until  we  find  it 
opposed  by  another,  which  again  leads  to  the 
discovery  of  a  still  higher  law — and  thus  knowl- 
edge grows  from  more  to  more. 

The  Hegelian  Method. — This  way  of  think- 
ing is  the  celebrated  dialectic  method  of  Hegel, 
which  consists  in  looking  for  apparent  contradic- 
tions in  truth,  and  then  finding  a  compromise  or 
reconciliation  in  a  broader  and  higher  principle. 
The  first  thing  is  the  thesis;  the  second  the  anti- 
thesis; and  the  third  the  synthesis.  "Thesis,  anti- 
thesis, synthesis"  is  at  once  the  formula  for  men- 
tal development  and  for  the  general  process  of 
human  evolution.  History,  therefore,  according 
to  Hegel,  can  be  a  science,  a  rational  explanation 
of  social  life  and  progress. 

Karl  Marx  was  a  disciple  of  Hegel  and  at  the 
same  time  an  opponent  of  his  system.  Hegel's 
views  concerning  the  ideal  development  of  so- 
ciety were  foolishness  to  Marx.  By  Hegel 
reason  was  placed  at  the  beginning  of  things;  by 


ECONOMIC  INTERPRETATION  OF  HISTORY  53 

Marx  it  was  placed  at  the  end  of  material  evolu- 
tion, reflecting  the  world  because  it  is  the  product 
of  the  world.  Thus  Marx  turned  the  dialectic  of 
Hegel  upside  down,  placing  it,  as  Engels  says, 
upon  its  feet  instead  of  on  its  head.  Thus  Marx 
says:  "It  is  not  the  consciousness  of  men  that 
determines  their  existence,  but,  on  the  contrary, 
their  social  existence  determines  their  conscious- 
ness." 1 

Material  evolution,  then,  is  the  foundation  of 
social  evolution,  and  the  key  to  the  interpreta- 
tion of  history.  Yet  while  Marx  rejects  the  ideal- 
istic philosophy  of  Hegel,  he  does  not  get  rid  of 
the  Hegelian  dialectic  way  of  thinking,  but  is 
always  looking  for  negations,  contradictions  and 
conflicts,  not  only  between  the  ideas  in  his  own 
mind,  but  between  opposing  forces  in  society 
from  the  earliest  times  until  the  present  day. 
The  theory  of  the  class  struggle,  therefore,  is  the 
most  vital  part  of  the  materialistic  interpretation 
of  history. 

The  Marsclan  Theory. — According  to  Marx, 
every  state  or  stage  of  human  society,  like  the 
rest  of  the  universe,  is  unstable  and  forever 
changing,  because  it  has  within  it  all  the  elements 
of  its  own  destruction,  opposing  forces  that  will 
break  it  up,  only  to  form  a  new  and  higher  con- 

i  Contribution  to  the  Critique  of  Political  Economy.     Author's 
Preface. 


54  ECONOMIC  INTERPRETATION  OF  HISTORY 

dition,  until  contradictions  and  conflicts  shall 
cease  in  the  perfect  harmony  of  democratic 
collectivism. 

Perhaps  the  best  statement  of  the  Marxian 
theory  of  history  is  that  given  by  Engels,  who 
puts  it  thus:  "In  every  historical  epoch,  the  pre- 
vailing mode  of  economic  production  and  ex- 
change, and  the  social  organization  necessarily 
following  from  it,  form  the  basis  upon  which  is 
built  up,  and  from  which  alone  can  be  explained, 
the  political  and  intellectual  history  of  that 
epoch;  that  consequently  the  whole  history  of 
mankind  ( since  the  dissolution  of  primitive  tribal 
society,  holding  land  in  common  ownership)  has 
been  a  history  of  class  struggles,  contests  be- 
tween exploiting  and  exploited,  ruling  and 
oppressed  classes."  * 

Here,  as  Seligman,  Skelton  and  others  have 
shown,  are  two  quite  distinct  interpretations  of 
history:  the  one  a  general  theory  that  all  social 
events  may  be  traced  to  economic  causes;  the 
other  a  particular  application  of  Hegelian  meth- 
od— the  theory  of  the  class  struggle. 

The  theory  of  Marx  is  really  an  extension  of 
the  theories  of  writers  like  Montesquieu  and 
Buckle  who  laid  stress  on  geography,  climate, 
and  other  features  of  man's  physical  environ- 

i  Preface  to   the   Communist   Manifesto,  by  Frederick  Engels, 
January  30,  1888. 


ECONOMIC  INTERPRETATION  OF  HISTORY  55 

ment.  It  is  but  a  step,  of  course,  from  the  ma- 
terial environment  to  the  methods  of  production 
and  distribution  which,  according  to  Marx,  are 
the  chief  factors  in  determining  man's  social, 
political,  legal,  philosophical,  scientific,  literary, 
artistic  and  religious  life. 

Applications. — Unquestionably,  the  principle 
of  economic  interpretation  throws  much  light 
upon  the  pages  of  history.  As  Morgan  has 
shown,  the  life  of  primitive  man  was  largely  de- 
termined by  certain  economic  factors — the  dis- 
covery of  fire,  the  invention  of  pottery,  the 
domestication  of  animals,  the  use  of  tools  and 
weapons  of  various  kinds.  Historians  speak  of 
the  ages  of  stone,  bronze  and  iron;  of  the  hunt- 
ing and  fishing,  the  pastoral,  agricultural,  com- 
mercial and  industrial  stages  of  civilization;  and 
it  is  clear  that  these  are  to  be  regarded  as  primary 
features  of  social  evolution. 

A  few  illustrations  will  show  the  application 
of  economic  interpretation  to  the  explanation  of 
the  facts  of  history,  by  socialists  and  other  ad- 
herents of  the  theory. 

When  people  lived  by  hunting  and  fishing, 
they  wandered  about  in  small  bands  under  the 
leadership  of  chiefs  whose  authority  was  very 
slight.  They  lived  in  caves  or  temporary  shelters, 
and  their  family  life  was  most  primitive.  They 
carried  on  ferocious  wars,  usually  slaughtering 


56  ECONOMIC  INTERPRETATION  OF  HISTORY 

their  prisoners.  Their  moral  and  religious  life 
was  determined  by  the  necessities  of  their  physi- 
cal environment. 

Pastoral  tribes  are  more  numerous  than  those 
in  the  lower  stage,  because  they  have  more  to  eat. 
They  are  migratory,  because  they  must  find 
pasture  for  their  sheep  and  cattle.  They  go  in 
large  bands,  under  chiefs  or  patriarchs,  and  often 
have  slaves  whom  they  can  use  and  control. 
They  worship  the  heavenly  bodies,  for  they 
usually  live  in  the  open  plains. 

Agricultural  people,  on  the  other  hand,  live  in 
one  place,  build  houses  and  fenced  cities,  own 
land,  are  peaceful,  and  carry  on  chiefly  defensive 
wars.  They  maintain  standing  armies,  have 
kings  or  other  permanent  rulers,  pay  taxes,  and 
keep  many  slaves.  They  are  strongly  bound  by 
custom  and  tradition,  develop  a  complicated  re- 
ligious system,  and  in  time  acquire  a  knowledge 
of  arts  and  sciences,  accumulating  civilization  as 
they  accumulate  property. 

The  migrations  of  ancient  times,  it  is  said, 
were  chiefly  for  the  sake  of  acquiring  hunting 
grounds  and  pastures  for  cattle;  for  lands, 
houses,  slaves,  and  plunder  of  every  other  kind. 
The  decline  of  the  Roman  Empire  was  due  to 
excessive  taxation  and  the  ruin  brought  upon  the 
small  farmers  by  the  latifundia  or  great  estates. 
The  Crusades  were  caused  by  the  interference  of 


ECONOMIC  INTERPRETATION  OF  HISTORY  57 

the  Turks  with  the  Eastern  trade  of  Venice  and 
Genoa. 

Modern  Examples. — Similar  economic  inter- 
pretations could  be  multiplied  without  end,  usu- 
ally containing  a  modicum  of  truth,  but  showing 
little  appreciation  of  the  complexity  of  social 
forces.  The  English  constitution,  in  this  view, 
was  the  result  of  resistance  to  taxation  on  the 
part  of  the  barons  and  the  free  cities.  The  Re- 
vival of  Learning  was  the  economic  awakening 
of  western  Europe.  The  Protestant  Reforma- 
tion was  a  rebellion  of  parts  of  Europe  against 
the  sale  of  indulgences  and  other  exactions  by 
the  Church.  The  Spanish,  French,  and  English 
alike  came  to  America  in  search  of  gold.  The 
American  Revolution  was  fought  as  a  protest 
against  arbitrary  taxation,  and  for  liberty  of 
trade.  The  French  Revolution  was  the  rebellion 
of  the  people  against  the  tyranny  of  the  landed 
aristocracy. 

The  War  of  1812  was  fought  to  secure  freedom 
in  neutral  trade.  The  invention  of  the  cotton 
gin  fastened  slavery  upon  the  South  for  more 
than  two  generations.  The  people  of  the  North 
objected  to  slavery  because  it  was  not  profitable 
there.  The  protective  tariff  and  the  slavery 
question  were  the  chief  causes  of  secession  senti- 
ment in  the  South.  The  Cuban  War,  it  is  said, 
was  promoted  and  provoked  by  the  sugar  inter- 


58   ECONOMIC  INTERPRETATION  OF  HISTORY 

ests  for  their  own  advantage.  An  underlying 
cause  of  the  late  World  War  was  a  commercial 
struggle  between  Germany  and  England.  The 
foreign  policy  of  all  modern  nations  is  governed 
chiefly  by  considerations  of  commerce,  and  every 
one  of  them  is,  in  the  words  of  Napoleon,  "a 
nation  of  shopkeepers." 

Within  a  given  nation,  socialists  say,  the  gov- 
ernment and  the  whole  legal  system  has  been 
created  by  the  ruling  classes  for  their  own  ad- 
vantage. The  prevailing  system  of  morals  is 
merely  "bourgeois  morality,"  designed  con- 
sciously or  unconsciously  for  the  protection  of 
property  and  the  personal  rights  of  the  capitalist 
class.  The  Church,  the  schools  and  most  so- 
cieties are  bulwarks  of  capitalism;  and  most 
clergymen,  teachers,  physicians,  lawyers,  and 
other  professional  people,  are  mere  parasites  or 
hangers-on  of  the  capitalist  class.  Religion, 
even,  has  been  invented  as  a  shrewd  trick  of  the 
ruling  classes  to  keep  the  people  humble  and 
patient  for  the  sake  of  rewards  in  heaven,  while 
in  this  world  they  live  on  the  crumbs  that  fall 
from  the  rich  man's  table. 

Complexity  of  Social  Forces. — The  economic 
interpretation  of  history,  then,  in  its  more  gen- 
eral form,  is  an  attempt  to  apply  the  methods 
of  physical  science  to  the  study  of  history,  by 
tracing  all  movements  and  events  back  to  their 


ECONOMIC  INTERPRETATION  OF  HISTORY  59 

causes,  and  by  reducing  all  the  secondary  causes 
to  a  single  force — the  economic.  Because  of 
this  there  is  some  reason  for  calling  the  Marxian 
system  "scientific,"  as  distinguished  from  the 
utopianism  of  earlier  writers. 

It  reminds  one,  however,  too  strongly  of  the 
"economic  man,"  that  fiction  of  certain  English 
economists  by  which  they  thought  to  make  of 
economics  a  purely  theoretical  and  exact  science, 
like  mathematics.  This  brave  attempt  was  bound 
to  fail,  as  it  did,  because  the  imaginary  economic 
being,  controlled  almost  wholly  by  the  desire  for 
gain,  did  not  correspond  to  men  as  they  are,  even 
among  such  keen  business  men  as  Greeks,  Jews, 
Armenians,  Scotch  and  Yankees. 

In  laying  so  much  stress  upon  economic  mo- 
tives, Marx  lays  himself  open  to  the  charge  of 
taking  a  narrow  and  unscientific  view  of  life,  of 
trying  to  explain  the  whole  of  life  by  what  is 
at  most,  only  a  part  of  it.  "Is  not  the  life  more 
than  meat,  and  the  body  than  raiment?"  The 
instinct  of  self-preservation  is  more  fundamental 
than  the  economic  instinct.  Men  desire  economic 
goods  for  the  sake  of  life,  not  life  for  the  sake  of 
the  means  of  life. 

Contradictions. — Indeed,  when  we  consider 
man  as  he  is,  we  find  him  a  complex  being  of 
numerous  instincts,  which  cannot  be  reduced  to 
a  single  principle  of  feeling  and  action.  The 


60  ECONOMIC  INTERPRETATION  OF  HISTORY 

reproductive  instinct,  certainly,  is  not  economic 
in  its  character,  and  frequently,  if  not  usually, 
takes  first  place  in  human  thought  and  behavior. 
And  yet,  a  philosophy  of  history  based  on  the 
study  of  population  and  family  life  alone,  how- 
ever important,  would  be  most  one-sided  and 
inadequate. 

The  religious  instinct  cannot  be  traced  to  an 
economic  origin,  and  often,  in  the  history  of 
individuals  and  communities,  it  has  determined 
life  and  action  in  opposition  to  obvious  economic 
interests.  The  history  of  religious  persecution  is 
full  of  such  instances,  not  to  mention  the  positive 
effects  of  great  religious  movements  on  the 
course  of  history. 

Instead  of  tracing  Christianity,  Buddhism, 
Mohammedanism,  and  other  world  religions,  to 
economic  causes,  it  would  be  more  profitable  to 
note  the  economic  and  political  effects  which  have 
proceeded  from  them,  as  in  the  work  of  mission- 
aries in  undeveloped  countries.  Worth  mention- 
ing, too,  is  the  effect  of  religious  rest  days  upon 
industrial  development,  the  taboo  on  meat  on 
fast  days  in  its  relation  to  the  fishing  industry, 
and  so  on.  One  could  almost  invent  a  religious 
interpretation  of  history  if  one  wished  to  carry 
the  "scientific"  method  to  such  absurd  extremes. 

Non-Economic  Instincts.  —  Other  impulses, 
too,  exist  side  by  side  with  those  already  men- 


ECONOMIC  INTERPRETATION  OF  HISTORY  6i 

tioned,  and  have  much  to  do  with  the  determi- 
nation of  human  conduct.  Such  are  the  fighting 
instinct;  the  instinct  of  play;  the  love  of  orna- 
ment, of  power,  of  place,  of  praise;  ambition, 
pride  and  self-esteem;  the  artistic,  musical,  lit- 
erary and  dramatic  instincts — the  whole  gamut 
of  instincts,  emotions  and  impulses  which  make 
up  human  nature. 

Then  there  are  racial  characteristics,  the  dy- 
namic energy  of  exceptional  men,  the  conserva- 
tive influence  of  custom,  the  stimulating  power  of 
eloquence,  the  suggestibility  of  the  crowd,  and  a 
thousand  and  one  other  circumstances  of  which 
the  historian  must  take  note,  although  they  do 
not  agree  with  any  single  rule  or  formula.  Life 
is  highly  complex,  both  in  individuals  and  in 
society,  and  cannot  be  explained  on  a  single 
principle,  whether  economic  or  otherwise.  In- 
deed, in  any  true  history,  the  human  being  as  he 
•is,  with  all  the  complexity  of  his  nature,  must 
occupy  the  center  of  the  stage,  as  a  force  to  be 
reckoned  with,  and  any  attempt  to  explain  his 
action  by  any  one  single  motive  or  cause  must 
result  in  failure. 

The  very  examples  which  the  Marxians  give 
may  be  used  to  show  that  their  main  proposition, 
while  containing  a  large  measure  of  truth,  gives, 
at  best,  a  partial  explanation  of  historical  facts 
and  movements.  The  social  life  of  primitive 


62   ECONOMIC  INTERPRETATION  OF  HISTORY 

peoples  is  by  no  means  exhausted  when  we  have 
fully  described  the  way  they  get  their  living,  nor 
can  their  behavior  be  altogether  traced  to  eco- 
nomic conditions.  In  fact,  economic  conditions 
are  often  changed  by  human  thought  and  effort, 
for  man  is  not  the  passive  recipient  of  progress, 
but  the  active  creator  of  it. 

Migrations,  like  those  of  the  Germanic  tribes 
who  invaded  the  Roman  Empire,  while  probably 
due  chiefly  to  over-population  of  the  northern 
lands  and  the  pressure  of  enemies  from  behind, 
were  perhaps  inspired  as  much  by  the  love  of 
adventure,  fighting,  and  military  glory  as  by  the 
desire  to  plunder  the  treasures  of  the  civilized 
world.  The  decline  of  Rome  may  have  been  due 
to  the  loss  of  her  best  men  in  wars,  to  vice,  dis- 
ease, and  the  decay  of  the  ancient  religious  and 
moral  standards.  The  Crusades  cannot  be  ex- 
plained without  taking  account  of  religious 
enthusiasm;  nor  can  the  Reformation  be  under- 
stood without  an  appreciation  of  the  power  of 
religious  motives. 

The  growth  of  the  British  constitution  is  a 
riddle  to  all  who  do  not  understand  the  sturdy, 
bulldog  breed,  that  would  not  submit  to  the 
tyranny  of  either  king  or  baron.  Often,  too, 
questions  of  taxation,  both  in  England  and 
America,  were  mere  pretexts  for  self-assertion 
and  rebellion. 


ECONOMIC  INTERPRETATION  OF  HISTORY  63 

The  Revival  of  Learning  was  principally  an 
intellectual  awakening,  the  economic  benefits  of 
which,  like  the  discovery  of  America,  were  effects 
rather  than  causes  of  the  new  spirit  that  animated 
the  western  world.  The  progress  of  science,  art 
and  literature  proceeds  chiefly  from  impulses 
scientific,  artistic  and  literary. 

Marxian  View  Narrow. — Government  surely 
does  reflect  economic  conditions  to  a  great  ex- 
tent, whether  it  be  monarchy,  aristocracy,  tyr- 
anny or  democracy,  but  the  ruling  class  must 
allow  the  main  body  of  freemen  to  share  its 
power,  else  its  rule  is  likely  to  be  of  brief  dura- 
tion. Also,  the  masses  usually  obtain  political 
power  as  soon  as  they  are  ready  for  it,  and  even 
sooner,  as  in  the  case  of  Mexico,  Russia  and  other 
premature  democracies. 

Standards  of  morality  cannot  be  separated 
from  the  actual  conditions  of  human  life,  but  to 
say  that  they  always  represent  class  interests  is 
to  take  a  very  narrow  view  of  age-long  and 
world-wide  principles.  Of  course,  there  can  be 
no  theft  where  there  is  no  property;  no  murder 
where  human  life  is  not  sacred;  no  adultery 
where  there  is  no  marriage;  no  wrongs  where 
there  are  no  rights. 

To  say  that  clergymen,  teachers,  and  all  other 
educated  people  are  mere  parasites  and  blood- 
suckers, is  to  make  a  grotesque  caricature  of 


64   ECONOMIC  INTERPRETATION  or  HISTORY 

these  torch-bearers  of  civilization,  without  whom 
the  world  would  still  be  in  the  darkness  of  bar- 
barism. 

Humanitarianism  is  non-economic,  and  even 
anti-economic,  in  its  character.  Socialism  itself, 
as  a  system  of  thought,  and  as  a  social  movement, 
has  proceeded  from  the  aristocracy  and  the  bour- 
geoisie, to  whose  economic  interests  it  is  bitterly 
opposed. 

As  to  comparatively  recent  events  in  world 
history,  while  economic  interpretation  throws 
much  light  upon  them,  it  is  often  misleading  as 
well  as  partial  in  its  explanations.  There  is  no 
evidence  to  show  that  the  sugar  interests  brought 
on  the  Cuban  War,  nor  that  the  manufacturers 
of  munitions  were  an  important  cause  of  the 
World  War.  Germany  and  England  were  busi- 
ness rivals,  no  doubt,  and  the  economic  interests 
of  Germany  and  Russia  clashed  in  the  Balkans ; 
but  the  war  cannot  be  explained  on  these  grounds 
alone.  There  were  quarrels  of  long  standing, 
racial  animosities,  dynastic  ambitions,  national 
aspirations,  personal  characteristics  and  many 
other  factors  in  the  situation. 

Historical  Explanation  Difficult. — So  com- 
plicated, indeed,  is  any  historical  combination,  so 
variable  the  human  and  physical  factors,  so 
powerful  and  even  explosive  the  forces,  that 
there  is  no  telling  what  will  come  out  of  it,  and 


ECONOMIC  INTERPRETATION  OF  HISTORY  65 

no  complete  explanation  of  the  results.  Consider, 
for  example,  the  probable  course  of  the  war  if 
Germany  had  won  the  Battle  of  the  Marne,  if 
the  cruisers  Goeben  and  Breslau  had  not  escaped 
from  Messina,  if  the  British  had  captured  Gal- 
lipoli,  if  the  Lusitania  had  not  been  sunk,  if 
Kerensky  had  been  a  strong  administrator,  if 
Lenin  and  Trotzky  had  not  been  allowed  to  go 
to  Petrograd,  if  the  policy  of  the  United  States 
had  been  governed  wholly  by  economic  motives. 

In  view  of  such  complexity,  of  the  tremendous 
latent  forces  involved,  of  the  influence  of  men, 
great  and  little,  of  great  events  arising  by  slight 
occasion,  like  a  conflagration  from  the  lighting 
of  a  match, — in  view  of  all  that  is  involved, 
practically  no  historians  defend  the  crude  eco- 
nomic interpretation  of  Marx  and  Engels;  and 
some  take  the  ground  that  the  mechanical  method 
of  physical  science  is  not  applicable  to  history,  as 
an  historical  combination  is  always  new  and 
unique,  the  result  always  containing  something 
more  than  the  sum  of  all  the  causes.  Evolution, 
as  the  philosopher  Bergson  would  say,  is  creative, 
and  the  explanations  of  the  socialists  do  not 
explain. 

And  when  we  come  to  prediction,  in  which 
Marx  and  his  school  so  freely  indulge,  the  taking 
of  such  liberties  with  the  future,  the  present  be- 
ing unknown,  is  neither  historical  nor  scientific. 


66  ECONOMIC  INTERPRETATION  OF  HISTORY 

Professor  F.  M.  Fling  goes  so  far  as  to  say:  "It 
should  be  noted  that  prediction  in  natural  science 
has  nothing  historical  in  it;  natural  science  can- 
not predict  the  unique.  History  never  repeats 
itself."  * 

Prophecy. — The  future,  if  not  absolutely  dark, 
is  so  obscured  that  it  is  safer  and  more  scientific 
not  to  prophesy.  No  doubt,  if  we  knew  all  about 
the  seed,  we  might  predict  the  character  of  the 
tree,  but  how  can  we  prophesy  concerning  seed 
that  we  do  not  understand,  or  a  tree  the  like  of 
which  we  have  never  seen? 

If  history  repeats  itself,  progress  is  not  to  be 
expected;  and  if  we  are  to  hope  for  progress, 
how  can  we  tell  what  kind  of  progress  it  will  be. 
Besides,  we  are  involved  in  the  flow  and  whirl  of 
things,  and  cannot  gain  a  point  of  view  from 
which  to  see  the  direction  in  which  we  are  mov- 
ing. The  economic  interpretation  of  history  may 
throw  some  light  upon  the  past,  but  the  future 
is  shrouded  in  mist,  which  those  dim  and  partial 
rays  cannot  penetrate. 

Economic  prophecy,  at  best,  is  mere  conjec- 
ture, and  has  not  yet  attained  the  dignity  of 
scientific  demonstration.  A  degree  of  proba- 
bility might  be  claimed  for  it.  But  prophets  do 
not  all  agree.  The  socialist  may  prophesy  in  a 
voluble  and  plausible  way,  while  the  capitalist, 

i  F.  M.  Fling,  The  Writing  of  History,  p.  23. 


ECONOMIC  INTERPRETATION  OF  HISTORY  67 

with  equal  plausibility,  may  prophesy  against 
him,  and  the  future  alone  can  settle  the  un- 
scientific conflict  of  opposing  probabilities. 
However,  the  capitalist  has  the  advantage  of  de- 
fending a  workable  and  working  system,  while 
the  socialist,  with  childlike  faith,  is  ready  to  take 
a  leap  in  the  dark. 

The  Class  Struggle. — If  the  general  theory  of 
economic  interpretation  so  poorly  fits  the  facts 
of  history,  what  shall  be  said  of  the  more  narrow 
Marxian  theory  that  history  is  to  be  interpreted 
almost  altogether  in  terms  of  the  class  struggle? 
The  more  general  theory,  as  Professor  Seligman 
has  shown,  might  be  held  by  an  out-and-out 
opponent  of  socialism,  but  the  theory  of  the  class 
struggle  is  one  of  two  main  pillars  of  the  Marx- 
ian temple — the  other  being  the  theory  of  ex- 
ploitation or  surplus  value. 

The  general  economic  interpretation,  with  all 
its  limitations  and  exaggerations  is  a  fruitful 
conception;  but  the  theory  of  the  class  struggle 
is  a  mere  caricature  of  historical  facts.  As  Pro- 
fessor Skelton  puts  it:  "Just  as  the  economic 
field  is  not  as  wide  as  human  life,  so  within  this 
field  class  struggle  is  not  the  sole  form  in  which 
the  influence  of  economic  conditions  is  exerted."  * 

Economic  Interpretation  It  ejected. — Marx's 
view  of  history  was  always  narrow,  crude,  and 

iO.  D.  Skelton,  Socialism,  a  Critical  Analysis,  p.  110. 


68  ECONOMIC  INTERPRETATION  OF  HISTORY 

harshly  economic,  but  Engels,  in  his  later  years, 
had  to  confess  that  he  and  Marx  had  made  too 
much  of  the  economic  factor  in  social  evolution. 
He  wrote:  "Marx  and  I  are  partly  responsible 
for  the  fact  that  younger  men  have  sometimes 
laid  more  stress  on  the  economic  side  than  it 
deserves.  In  meeting  the  attacks  of  our  op- 
ponents it  was  necessary  for  us  to  emphasize  the 
dominant  principle  denied  by  them;  and  we  did 
not  always  have  the  time,  place  or  opportunity  to 
let  the  other  factors  which  were  concerned  in  the 
mutual  action  and  reaction  get  their  deserts."  * 
But  Engels  and  all  other  orthodox  socialists 
call  their  system  "scientific"  because  of  its  eco- 
nomic interpretation,  which,  they  believe,  unveils 
the  past,  reveals  the  future,  and  assures  the  reali- 
zation of  their  dearest  hopes.  Yet  historians  re- 
ject it;  the  higher  critics  explain  it  away;  while 
the  orthodox  blindly  hold  it  fast,  not  knowing 
what  else  to  do.  The  case  is  well  summed  up  by 
Professor  Simkhovitch  thus:  "To-day,  such  is 
the  irony  of  fate,  the  economic  interpretation  of 
history,  while  of  great  value  to  the  historical 
student,  is  an  unyielding  and  merciless  steel  trap 
in  which  so-called  scientific  socialism  is  caught 
and  held."  2 

i  Frederick  Engela,  letter  dated  September,  1890.  Cf.  Ma- 
zaryk,  Philosophische  u.  sociologische  Grwndl.  d.  Marxismus,  p. 
104. 

2V.  G.  Simkhovitch,  Marxism  versus  Socialism,  p.  46. 


IV 
THE  MARXIAN  THEORY  OF  VALUE 

It  has  often  been  claimed  that  the  labor-cost 
theory  of  value  has  no  vital  relation  to  the  gen- 
eral body  of  socialistic  doctrine,  but,  as  L.  B. 
Boudin,  of  New  York,  one  of  the  most  orthodox 
socialists,  rightly  says:  "The  Marxian  theoreti- 
cal system  is  one  solid  structure  and  cannot  be 
properly  understood  unless  viewed  as  a  whole 
from  foundation-stone  to  roof-coping.  The 
system  must  be  examined  as  a  whole  and  accept- 
ed or  rejected  in  its  entirety,  at  least  as  far  as 
the  structural  parts  are  concerned."  * 

In  Marx's  great  book,  "Capital,"  which  should 
have  been  translated  "Capitalism,"  he  gives  from 
his  peculiar  point  of  view — the  point  of  view  of 
economic  or  materialistic  interpretation — an  ex- 
amination of  capitalistic  society  designed  to  show 
the  "prevailing  mode  of  economic  production  and 
exchange,"  the  particular  form  of  robbery  or 
exploitation  belonging  to  capitalism,  and  the 
kind  of  class  struggle  which  must  arise  out  of  the 
conflict  of  interests  between  the  employers  and 

i  L.  B.  Boudin,  The  Theoretical  System  of  Karl  Marx,  p.  49. 

69 


70      THE  MARXIAN  THEORY  OF  VAI.UE 

the  employed.  In  early  times,  Marx  would  say, 
we  had  slavery;  later,  serfdom;  and  now,  under 
capitalism,  we  have  "wage  slavery,"  which  will 
continue  with  increasing  misery  until  the  social 
revolution. 

What  Marx  is  really  trying  to  show,  then, 
under  cover  of  certain  teachings  of  Adam  Smith, 
Ricardo  and  other  English  economists,  is  that  the 
proletariat,  the  working  class,  do  practically  all 
the  work,  create  all  commodities  and  values,  and 
yet  pay  an  outrageous  tribute  to  the  bourgeoisie, 
the  capitalists,  who  do  practically  nothing,  yet 
live  upon  surplus  value  stolen  from  the 
proletariat. 

Bicardo's  Labor-Cost  Theory  Adapted. — In 
casting  about  for  a  weapon  with  which  to  smite 
the  Philistines,  Karl  Marx  found  ready  to  hand 
the  labor-cost  theory  of  Ricardo,  which,  after 
some  trimming  and  sharpening,  he  used  against 
the  economists  themselves  and  other  defenders 
of  capitalism.  Ricardo  says:  "The  value  of  a 
commodity  or  the  quantity  of  any  other  com- 
modity for  which  it  will  exchange,  depends  on  the 
relative  quantity  of  labor  which  is  necessary  for 
its  production."  * 

Marx  expresses  the  same  idea  in  slightly  dif- 
ferent words  and  with  a  more  narrow  connota- 

i  David  Ricardo,  The  Principles  of  Political  Economy  and  Tax- 
ation, 1817,  Chap.  I,  Sect.  1. 


THE  MARXIAN  THEORY  or  VALUE       71 

tion  when  he  says :  "Commodities  in  which  equal 
quantities  of  labor  are  embodied,  or  which  can 
be  produced  in  the  same  time,  have  the  same 
value."  1 

The  problem  is,  to  explain  why  commodities 
exchange,  as  they  do,  in  certain  ratios,  quantity 
for  quantity;  why  ten  yards  of  cotton  cloth  ex- 
change for  one  hat,  four  bushels  of  wheat,  eight 
bushels  of  corn,  five  ounces  of  silver,  or  a  quarter 
of  an  ounce  of  gold.  Value  is  ratio  in  exchange, 
a  relation  of  quantity,  and  any  correct  theory  of 
value  must  show  who  or  what  it  is  that  creates 
value,  why  commodities  tend  to  exchange  in 
certain  ratios,  and  why  market  values  fluctuate 
above  and  below  the  normal. 

Marx's  Adaptation. — It  is  clear,  says  Marx, 
that  the  cause  and  measure  of  value  must  be 
something  which  all  commodities  have  in  common 
but  in  varying  quantities.  They  all  have  size, 
weight,  color,  and  other  physical  properties,  but 
these  have  no  direct  relation  to  value  in  exchange, 
but  only  to  use-values.  They  all  have  use-value 
or  utility,  but  this  cannot  be  the  cause  of  value, 
for  "one  use-value  is  just  as  good  as  another,  pro- 
vided only  it  be  present  in  sufficient  quantity." 
Therefore,  there  is  only  one  other  property  which 
all  commodities  have  in  common,  the  fact  that 
they  are  all  produced  by  human  labor. 

i  Capital,  p.  6,  Swan  Sonnenschein,  publisher. 


72       THE  MARXIAN  THEORY  OF  VALUE 

Labor,  then,  must  be  the  cause  and  measure  of 
value.  But  the  measure  of  labor  is  its  duration. 
Therefore,  the  exchange  values  of  commodities 
are  determined  by  the  amount  of  labor-time  in- 
corporated or  materialized  in  them.  But  labor 
may  be  misdirected.  Therefore,  the  labor  which 
creates  value  must  be  "socially  necessary,"  or 
properly  applied  to  the  creation  of  utilities. 
Thus  Marx  arrives  at  the  conclusion  that :  "value 
is  determined  by  the  socially  necessary  labor- 
time  that  is  required  to  produce  an  article  under 
the  normal  conditions  of  production  and  with  the 
average  degree  of  skill  and  intensity  prevalent 
at  the  time."  l 

Importance  of  the  Theory. — Such  is  the  cele- 
brated labor-cost  theory  of  value,  one  of  the 
foundation  stones  of  the  Marxian  system. 
Orthodox  socialists  are  deeply  concerned  to  prove 
it  true,  for  if  it  can  be  shown  that  all  values  are 
measured  by  labor-time,  or  are  proportional  to 
the  quantity  of  labor  used  in  producing  them,  it 
must  follow,  they  think,  that  labor  is  also  the 
cause  or  creator  of  values.  And  if  this  is  true, 
the  employers  and  all  the  rest  of  the  capitalist 
class  are  nothing  but  parasites  and  blood- 
suckers, drawing  nourishment  from  the  pro- 
ducers and  giving  nothing  in  return. 

It  should  be  noted,  however,  in  passing,  that 

i  Capital,  p.  6. 


THE  MARXIAN  THEORY  OF  VALUE      73 

the  Marxians  may  be  wrong  in  this  chain  of 
reasoning,  for  labor  might  be  the  measure  of 
value  but  not  the  cause,  or  it  might  be  the  cause 
of  value,  but  not  the  measure  of  it.  In  fact,  now 
that  the  labor-cost  theory  is  discredited,  many 
socialists  say  that  it  has  no  essential  connection 
with  the  proposition  that  labor  is  the  chief  factor 
in  the  creation  of  wealth  and  values. 

At  first  glance  the  labor-cost  theory  has  the 
appearance  of  a  self-evident  truth,  but  the  more 
one  considers  it  the  more  unsatisfactory  and  one- 
sided it  appears.  Certainly,  it  is  not  a  general 
law  of  value  explaining  the  exchange  ratios  of 
all  things  bought  and  sold,  for  Marx  himself 
expressly  excludes  from  the  scope  of  his  theory 
certain  things  which,  by  his  own  definition,  must 
be  classed  as  commodities. 

Fatal  Exceptions. — The  theory  may  partially 
explain  the  value  of  factory  products  and  other 
reproducible  goods,  but  it  certainly  does  not 
account  for  the  value  of  land,  particularly  un- 
improved city  lots.  Such  land  can  be  exchanged 
for  cotton,  wheat,  corn,  hats,  silver  or  gold,  and 
must  therefore  have  some  property  in  common 
with  them  all,  which  is  the  cause  and  measure  of 
their  value.  But  it  cannot  be  labor-cost,  for 
land  is  a  gift  of  nature. 

True,  land  would  have  no  value  if  people  did 
not  live  and  work  in  the  neighborhood,  but  in  so 


74       THE  MARXIAN  THEORY  OF  VALUE 

far  as  the  particular  land  in  question  is  con- 
cerned, no  labor-time  has  been  applied  to  it,  and 
society,  which  gives  it  a  value,  stands  to  it  in  the 
relation  of  consumer  rather  than  of  producer. 
Marx  himself  is  conscious  of  this  difficulty  and 
tries  to  evade  it  by  saying  that  land  is  not  a  com- 
modity, and  by  the  still  more  absurd  statement: 
"An  object  may  have  a  price  without  having 
value;  for  instance,  the  price  of  uncultivated 
land,  which  is  without  value  because  no  human 
labor  is  incorporated  in  it."  * 

The  Marxian  theory  is  equally  incompetent  to 
account  for  the  value  of  labor-power  itself,  which 
is  a  commodity,  in  so  far  as  it  is  bought  and  sold, 
and  stands  with  wheat,  silver,  and  all  other  com- 
modities in  the  infinite  network  of  exchange  re- 
lations. Marx  says :  "The  value  of  labor-power 
is  determined,  as  in  the  case  of  every  other  com- 
modity, by  the  labor-time  necessary  for  the  pro- 
duction, and  consequently  also  the  reproduction 
of  this  special  article — in  other  words,  the  value 
of  labor-power  is  the  value  of  the  means  of  sub- 
sistence of  the  laborer."  2 

But  cost  of  subsistence,  while  it  has  its  influence 
on  the  average  wages  of  unskilled  labor,  has  little 
to  do  with  the  wages  pf  particular  workers  of  un- 
usual attainment.  Native  ability,  the  power  and 
the  will  to  work,  is  the  chief  factor  in  the  deter- 

i  Capital,  p.  75.  2  IUd.,  p.  149. 


THE  MARXIAN  THEORY  OF  VALUE      75 

mination  of  earnings,  especially  in  the  case  of 
men  of  talent  and  genius,  whose  rewards  are 
usually  out  of  all  proportion  to  the  cost  of  their 
bringing-up.  Marx  tries  to  evade  this  difficulty 
by  giving  a  common  but  erroneous  explanation 
thus:  "All  labor  of  a  higher  or  more  compli- 
cated character  than  average  labor  is  expendi- 
ture of  labor-power  of  a  more  costly  kind,  labor 
power  whose  production  has  cost  more  time  and 
labor,  and  which  therefore  has  a  higher  value, 
than  unskilled  or  simple  labor-power."  x 

Where  Theory  Collapses.  —  The  scqialist 
theory  of  value  fairly  collapses  when  it  comes  to 
explain  the  value  of  "intangible  things  such  as 
conscience  and  honor"  which  are  sometimes 
bought  and  sold,  as  when  a  citizen  sells  his  vote, 
an  alderman  his  conscience,  or  a  merchant  his 
good  name.  Clearly,  such  intangibles  as  honor, 
influence,  good-will,  trade-marks,  franchises  and 
the  like,  have  exchangeable  value,  but  Marx 
asserts  that  such  things  "have  a  price  without 
having  a  value,  the  price  in  that  case,  being 
imaginary,  like  certain  quantities  in  mathe- 
matics." 2 

Doubtless,  a  politician's  conscience  may  be 
imaginary,  but  he  seldom  sells  it  for  imaginary 
gold,  and  so  with  all  intangibles  that  are  bought 
and  sold.  They  have  a  value  in  exchange,  not 

^  Capital,  p.  179.  *IUd.,  p.  75, 


76       THE  MARXIAN  THEORY  OF  VALUE 

because  of  any  labor-cost  of  production,  but  be- 
cause they  are  useful  to  the  people  who  are  will- 
ing to  pay  the  price. 

The  Factor  of  Scarcity. — When  we  consider 
material  tangible  commodities  other  than  land, 
we  find  innumerable  exceptions  to  the  supposed 
law  that  exchange  value  is  materialized  or 
crystallized  or  congealed  labor-time.  Scarce 
articles,  such  as  old  coins,  stamps,  manuscripts, 
autographs,  birds'  eggs,  fossils,  pictures,  statu- 
ary, and  the  thousand  and  one  objects  dear  to  the 
heart  of  collectors,  are  rightly  called  commodi- 
ties, although  there  is  no  discoverable  relation 
between  their  market  value  and  their  cost  of 
production  as  measured  in  labor-time. 

Of  course,  such  articles  are  not  reproducible 
by  labor,  and  it  is  said  that  Marx  never  intended 
his  theory  to  apply  to  them.  This  only  shows,  as 
Spargo  admits,  that  the  theory  is  not  all  in- 
clusive, but  strictly  limited  in  its  application.  In 
other  words,  it  is  not  a  general  theory  of  value  at 
all,  but  an  attempt  to  explain  the  value  of  a 
particular  class  of  articles,  produced  at  a  given 
time  and  place,  under  special  conditions,  and 
with  all  the  other  factors  remaining  unchanged. 
Surely,  with  all  these  limitations  and  qualifica- 
tions the  scope  of  the  theory  rapidly  approaches 
the  vanishing  point. 


THE  MARXIAN  THEORY  OF  VALUE      77 

The  Factor  of  Social  Utility. — The  works  of 
authors,  artists,  and  inventors,  must  also  be  ex- 
cluded, because  they  are  not  freely  reproducible, 
and  there  is  no  definite  relation  between  their 
value  and  the  time  spent  in  creating  them.  A 
great  painter  may  receive  $50,000  for  the  work 
of  a  few  weeks  or  months,  while  a  mere  dauber 
might  spend  years  on  a  picture  which  his  best 
friends  would  not  accept  as  a  gift.  The  incom- 
petent one  has  not  been  able  to  create  a  work  of 
social  utility,  so  his  time  has  been  wasted  and  has 
no  relation  to  the  value  of  the  product.  Social 
utility,  then,  is  the  prime  factor  in  the  determi- 
nation of  value,  and  labor-cost  is  a  matter  of 
secondary  importance. 

Mine  and  Farm  Costs. — When  at  last  we 
come  to  commodities  that  are  freely  reprodu- 
cible and  produced  under  competitive  conditions, 
we  find  that  even  here  the  labor-cost  theory  does 
not  strictly  apply.  The  value  of  gold  and  silver, 
for  example,  has  slight  relation  to  their  cost  of 
production  because  of  the  varying  richness  and 
depth  of  the  ore  deposits,  and  for  other  reasons. 
In  some  mines  gold  is  produced  at  a  cost  of  $10 
worth  of  labor,  in  others  $20,  in  others  $50  or 
more,  and  yet  all  of  the  metal,  produced  at 
various  costs,  sells  at  the  same  mint  price  of 
$20.67  per  ounce. 

Every  farmer  knows  that  the  labor-cost  theory 


78       THE  MARXIAN  THEORY  OF  VALUE 

fails  to  explain  the  value  of  agricultural  produce. 
On  the  best  lands  wheat  may  be  grown  at  a  labor- 
cost  of  $1.00  a  bushel;  on  poorer  lands  at  $1.25, 
$1.50  or  $1.75;  and  yet  the  total  supply  is  very 
likely  to  be  sold  at  $1.75,  which  economists 
usually  call  the  "marginal"  cost.  This  rule  of 
varying  costs  applies  to  the  production  of  all  raw 
materials:  grain,  meat,  leather,  cotton,  wood, 
sugar,  lumber,  iron,  clay,  gold,  silver,  and  the 
rest,  because  of  the  fact  that  land,  from  which 
they  are  all  derived,  is  limited  in  quantity  and 
diverse  in  quality. 

Manufactured  Goods. — Finally,  the  value  of 
staple  manufactured  articles,  which  Marx  has 
chiefly  in  mind — such  as  shoes,  cotton  and  woolen 
goods,  refined  sugar,  furniture,  steel  rails,  jew- 
elry— is  not  determined  chiefly  by  their  labor- 
cost. 

In  the  first  place,  the  value  of  the  raw  ma- 
terials of  which  they  are  composed  is  not  so 
determined. 

In  the  second  place,  the  labor  employed  in  pro- 
duction varies  greatly  according  to  the  kind  and 
amount  of  land  and  machinery  used,  the  skill  of 
the  workers,  the  efficiency  of  the  management. 

In  the  third  place,  the  value  of  manufactured 
goods  is  not  determined  solely  by  cost,  which 
limits  supply,  nor  by  utility,  which  controls  de- 
mand, but  by  both  of  these  factors  together.  In 


THE  MARXIAN  THEORY  OF  VALUE      79 

fact,  utility  and  scarcity  are  the  prime  factors  of 
value,  and  cost  is  secondary,  as  one  of  the  limita- 
tions of  nature  which  make  things  scarce. 

The  manufacturer,  whose  profits  arise  from 
an  excess  of  revenue  over  expenditure,  and 
whose  losses  come  from  an  excess  of  expenditure 
over  revenue,  knows  well  that  the  value  of  his 
goods  depends  far  more  upon  the  demand  of  the 
market  than  upon  the  cost  of  production  to  him- 
self or  his  competitors.  In  fact,  if  the  demand 
is  weak  he  must  cut  down  his  costs,  for  if  the 
mountain  will  not  come  to  Mahomet,  Mahomet 
must  go  to  the  mountain. 

The  manufacturer  must  supply  an  article  that 
will  satisfy  some  human  want,  and  at  a  suitable 
price,  else  he  will  not  be  able  to  sell.  For  this 
reason,  intelligence,  foresight,  will-power,  and 
all  the  other  mental  and  moral  qualities  of  men 
have  much  more  to  do  with  the  final  result  than 
the  undirected  or  misdirected  expenditure  of 
labor-power.  As  the  brain  is  the  center  of  action 
in  the  human  body,  so  the  direction  and  manage- 
ment of  business  enterprise  is  what  gives  value 
to  the  product,  which  may  or  may  not  be  pro- 
portional to  the  hours  or  days  or  years  of  labor 
spent  upon  it. 

Marx's  'Admission. — Of  course,  Marx  knew 
all  that,  and  even  admitted  it  here  and  there  in 
his  writings,  though  he  did  not  give  it  the  proper 


80      THE  MARXIAN  THEORY  OF  VALUE 

place  in  his  system,  because  he  wished  to  exag- 
gerate the  importance  of  unskilled  labor,  the 
labor  of  the  proletariat.  In  the  very  first  chap- 
ter of  "Capital"  he  says:  "Nothing  can  have 
value  without  being  an  object  of  utility.  If  the 
thing  is  useless,  so  is  the  labor  contained  in  it; 
the  labor  does  not  count  as  labor,  and  therefore 
creates  no  value."  l 

This  is  a  very  significant  admission,  quite  in- 
consistent with  the  basic  contention  of  Marx  that 
labor-time,  and  that  alone,  is  the  cause  and 
measure  of  value.  If  there  can  be  no  exchange 
value  without  utility,  then  utility  must  be  the 
cause  or  a  vital  part  of  the  cause  of  value,  and 
it  must  have  something  to  do  with  the  measure- 
ment of  value  also. 

In  another  place  Marx  says:  "A  useful 
article  has  value  only  because  human  labor  in  the 
abstract  has  been  embodied  in  it."  2 

Apart  from  the  misapplication  of  the  word 
"abstract"  to  something  so  concrete  as  labor- 
time,  this  statement  is  quite  untrue,  as  has  been 
shown  in  the  numerous  illustrations  given  above. 
The  very  reverse  of  it  is  true,  and  it  should  be 
changed  to  read  as  follows:  "An  article  in 
which  labor  has  been  embodied  has  value  only 
because  it  is  a  useful  article." 

Not  all  commodities  which   cost  labor  have 

i  Capital,  p.  8.  2  Hid.,  p.  5, 


THE  MARXIAN  THEORY  OF  VALUE       81 

value,  but  all  useful  commodities  have  value,  if 
they  are  sufficiently  limited  in  quantity.  Utility, 
therefore,  is  more  essential  to  value  than  labor- 
cost,  as  in  the  case  of  land,  which  has  utility  and 
scarcity,  but  no  labor  cost.  Of  course,  the  value 
of  reproducible  commodities  is  related  to  their 
labor-cost,  though  not  in  the  direct  and  exclusive 
Marxian  sense. 

Utility. — Socialists  who  lay  chief  stress  on  cost 
of  production  as  the  origin  and  measure  of  value,  L 
are  placing  the  cart  before  the  horse.  All  com- 
modities have  one  common  property — utility — 
without  which  they  would  not  be  commodities, 
for  they  would  not  be  bought  and  sold.  Most 
commodities  have  another  common  property — 
labor  cost — which  aids  in  the  determination  of 
value  by  limiting  supply. 

But  labor  is  the  means,  and  utility,  or  the 
power  to  satisfy  human  needs,  is  the  end  of  the 
productive  process  and,  practically  as  well  as 
logically,  the  end  is  more  important  than  the 
means.  It  is  utility  that  arouses  desire  and  de- 
mand, sets  in  motion  the  wheels  of  production, 
and  gives  value  to  the  land,  capital,  and  labor 
which  are  the  means  to  the  final  end  and  purpose 
of  economic  activity. 

So  it  is  utility  that  is  the  test  of  value,  and  not ' 
the  expenditure  of  a  certain  amount  of  labor- 
time.    The  measure  of  labor  is  not  its  duration, 


82       THE  MARXIAN  THEORY  OF  VALUE 

but  its  efficiency,  and  the  measure  of  efficiency 
is  the  quantity  and  quality  of  the  output,  the 
extent  to  which  it  ministers  to  human  wants.  It 
is  not  time  that  counts,  but  what  is  done  in  time. 
It  is  not  cost  that  must  be  first  considered,  but 
the  ultimate  goal — the  welfare  of  the  human  race. 

Brain  Work. — Marx  grudgingly  admits  the 
unequal  efficiency  of  labor,  as  though  he  realized 
that  the  admission  was  a  denial  of  the  theory. 
He  wrote:  "Just  as  in  society,  a  general  or  a 
banker  plays  a  great  part,  but  mere  man,  on  the 
other  hand,  a  very  shabby  part,  so  here  with  mere 
human  labor.  Skilled  labor  counts  only  as 
simple  labor  intensified,  or,  rather,  as  multiplied 
simple  labor,  a  given  quantity  of  skilled  being 
considered  equal  to  a  greater  quantity  of  simple 
labor."  ^$41+ 

If  Marx  had  followed  this  line  of  thought  he 
would  have  seen  that  an  increase  in  the  efficiency 
of  labor  in  a  given  industry,  while  it  generally 
increases  the  value  of  the  total  product,  often, 
if  not  usually,  decreases  the  exchange  value  per 
article  produced. 

He  would  also  have  seen  that,  as  in  war,  a 
competent  general  is  a  host  in  himself,  so,  in  the 
industrial  army,  a  great  captain  of  industry,  by 
the  power  of  his  thought,  his  imagination,  fore- 
sight, judgment,  organization,  direction,  deter- 

i  Capital,  p.  11. 


THE  MARXIAN  THEORY  OF  VALUE       83 

mination,  courage  and  incessant  activity,  is  the 
dynamic  center  of  industrial  life,  with  a  creative 
force  out  of  all  proportion  to  the  duration  of 
effort,  and  of  greater  social  value  than  thousands 
of  hours  of  "simple  average  labor-time." 

Labor  Cost  Theory  Discredited. — Enlight- 
ened socialists  of  the  present  day,  being  obliged 
to  abandon  the  strict  Marxian  theory  of  value, 
qualify  and  explain  it  away,  until  it  has  little  re- 
semblance to  its  original  form.  Engels  said  that  , 
the  law  of  value  was  valid  from  early  times  down 
to  the  fifteenth  century.  Untermann  says  it  does 
not  work  well  now,  but  will  be  in  good  going 
order  after  the  social  revolution.  Sombart  says 
it  is  not  a  fact  of  experience  but  a  fact  of  thought. 
Veblen  says  that  Marx  was  not  trying  to  explain 
exchange  value  at  all,  but  to  interpret  value  in 
terms  of  the  "unfolding  life  of  man  in  society." 

Others,  like  Kautsky,  insist  that  the  Marxian 
theory  of  value  has  nothing  to  do  with  socialism, 
and  that  it  has  no  vital  relation  to  the  other 
Marxian  doctrines,  especially  the  theory  of 
surplus  value.  But,  as  Professor  Skelton  has 
well  shown,  Marx  was  trying  to  give  an  analy- 
sis or  examination  of  capitalism  in  order  to  show 
within  it  the  conflict  of  opposing  forces,  and  the 
theory  of  value  was  an  essential  part  of  that 
analysis. 

At  any  rate,  Marx  himself  thought  the  theory 


84      THE  MARXIAN  THEORY  OF  VAI^UE 

important,  for  he  said:  "The  recent  scientific 
discovery  that  the  products  of  labor,  so  far  as 
they  are  values,  are  but  the  material  expressions 
of  the  human  labor  spent  in  their  production, 
marks  an  epoch  in  the  development  of  the  human 


race." 


Without  doubt  a  common  economist  might 
accept  the  labor-cost  theory  of  value  without 
going  on  to  socialism,  but  can  the  followers  of 
Marx  deny  so  important  a  part  of  their  master's 
teaching  and  still  call  themselves  "scientific" 
socialists?  Can  they  reject  the  labor-cost  theory 
and  still  hold  to  the  theory  of  surplus  value?  If 
so,  they  must  be  taking  surplus  value  on  faith  or 
setting  it  upon  a  new  foundation. 


THE  MARXIAN  LAW  OF, 
INCREASING  MISERY 

The  Reverend  Thomas  Robert  Malthus,  in  the 
year  1798,  published  an  attack  upon  the  Utopian 
socialism  of  the  day  entitled,  "An  Essay  on  the 
Principle  of  Population,"  and  thus  became  the 
godfather  of  the  celebrated  or  notorious  theory 
that  bears  his  name.  To  be  sure,  he  did  not 
originate  the  theory,  and  Karl  Marx  calls  his 
work  a  "school-boyish  superficial  plagiary  of  De 
Foe,  Townshend,  Wallace,  etc."  But  to  how 
many  is  it  given  to  create  a  new  idea?  Even 
Marx  might  be  accused  of  borrowing  ideas,  for 
all  of  his  distinctive  doctrines  may  be  found  in 
the  writings  of  his  predecessors,  although  the 
combination  was  the  work  of  Marx  alone.  In  the 
words  of  the  Preacher:  "There  is  nothing  new 
under  the  sun;"  or,  as  Chaucer  puts  it: 

"For  out  of  olde  feldes,  as  men  seith, 
Cometh  al  this  newe  corn  fro  yeer  to  yere, 
And  out  of  olde  bokes  in  good  feith 
Cometh  al  this  newe  science  that  men  lere."  * 

i  Chaucer,  The  Parlement  of  Foulea. 
85 


86  MARXIAN  LAW  OF  MISERY 

Population,  says  Malthus,  tends  to  increase 
faster  than  the  means  of  subsistence.  The  natu- 
ral resources  of  the  earth  are  limited,  but  there 
is  no  definite  limit  to  the  multiplication  of  popu- 
lation other  than  the  supply  of  food  and  the 
other  means  of  subsistence.  Therefore,  unless 
the  growth  of  population  be  checked  in  some 
way,  poverty  and  misery  will  prevail  in  every 
country.  This  is  the  Malthusian  theory  of  popu- 
lation, with  its  dismal  shadow,  the  iron  law  of 
wages,  for  which  Ricardo  usually  gets  the  credit 
— or  discredit. 

Living  Costs  Determine  Wages. — The  rate  of 
wages,  according  to  this  so-called  law,  is  deter- 
mined by  the  cost  of  living  of  the  working  class, 
the  quantity  of  commodities  necessary  to  keep  the 
laborers  alive  and  enable  them  to  raise  families 
to  take  their  places  after  they  are  disabled  or 
dead.  Wages,  it  is  said,  cannot  permanently 
fall  below  this  limit,  for  if  they  do  the  death  rate 
will  increase,  the  marriage  rate  and  the  birth  rate 
will  decline,  and  the  working  class  will  diminish 
in  numbers  until  wages  rise  to  their  natural  level. 

On  the  other  hand,  according  to  this  theory, 
wages  cannot  permanently  exceed  the  subsistence 
of  the  laborer  and  his  family,  for  if  they  do,  the 
marriage  rate  and  the  birth  rate  will  increase, 
the  death  rate  will  decline,  and  the  working  class 
will  increase  in  numbers  until  wages  fall  to  their 


MARXIAN  LAW  or  MISERY  87 

natural  level.  The  "natural  level,"  of  course, 
is  the  cost  of  subsistence  of  the  working  class. 

It  was  this  doleful  theory,  with  its  gloomy  out- 
look, that  led  Carlyle  to  call  political  economy 
"the  dismal  science,"  and  it  is  this  melancholy 
point  of  view,  somewhat  shifted,  which  many  so- 
cialists take  when  they  magnify  the  evils  of  the 
present  industrial  system,  and  say  that  "increas- 
ing misery"  must  follow  in  the  wake  of  capital- 
ism until  the  social  revolution  shall  sweep  it  all 
away. 

Socialist  Interpretation.  —  Indeed,  socialists 
often  speak  and  write  as  though  poverty  and 
pain,  vice  and  crime,  disease  and  death,  had  no 
place  in  the  world  before  the  coming  of  capital- 
ism, and  would  be  quite  unknown  in  the  perfect 
day  of  collectivism.  Strange,  that  they  should  be 
so  pessimistic  about  the  present  and  so  optimistic 
about  the  future,  that  they  should  have  so  much 
and  so  little  faith  in  human  nature  under  differ- 
ent conditions  and  circumstances.  All  this,  of 
course,  was  quite  foreign  to  the  thought  of  Mal- 
thus,  who  with  more  show  of  reason,  traced  most 
social  evils  to  the  multiplication  of  population. 

The  great  socialist  agitator  of  Germany,  Fer- 
dinand Lassalle,  had  much  to  say  of  the  "iron"  or 
"brazen"  law  of  wages.  In  one  place  he  says: 
"The  average  wage  always  remains  reduced  to 
the  necessary  subsistence  which  national  custom 


88  MARXIAN  LAW  OF  MISERY 

demands  for  the  continuance  of  life  and  propa- 
gation." 1 

In  the  Communist  Manifesto,  Marx  and  En- 
gels  say:  "The  average  price  of  wage-labor  is  the 
minimum  wage,  i.  e.,  that  quantum  of  the  means 
of  subsistence  which  is  absolutely  requisite  to 
keep  the  laborer  in  bare  existence  as  a  laborer."  2 

And  again:  "The  modern  laborer,  instead  of 
rising  with  the  progress  of  industry,  sinks  deeper 
and  deeper  below  the  conditions  of  existence  of 
his  own  class.  He  becomes  a  pauper,  and 
pauperism  develops  more  rapidly  than  popula- 
tion or  wealth."  3 

In  "Capital,"  Marx  says  that  the  "value  of 
labor-power  is  determined  by  the  sum  of  the 
means  of  subsistence  necessary  for  the  produc- 
tion of  labor-power." 

In  another  passage  of  the  same  work  he  says : 
"In  proportion  as  capital  accumulates,  the  lot 
of  the  laborer,  be  his  payment  high  or  low,  must 
grow  worse.  The  law  that  always  equilibriates 
the  relative  surplus  population  or  industrial  re- 
serve army  to  the  extent  and  energy  of  accumu- 
lation, establishes  an  accumulation  of  misery, 
corresponding  with  accumulation  of  capital.  Ac- 
cumulation of  wealth  at  one  pole  is,  therefore,  at 

1  Cited  in  Ensor,  Modern  Socialism,  p.  38. 

2  Communist  Manifesto,  p.  32. 
sj&tU,  p.  29. 

*  Capital,  p.  150. 


MARXIAN  LAW  OF  MISERY  89 

the  same  time  accumulation  of  misery,  agony  of 
toil,  slavery,  ignorance,  brutality,  mental  degra- 
dation, at  the  opposite  pole.  Along  with  the 
constantly  diminishing  number  of  the  magnates 
of  capital  grows  the  mass  of  misery,  oppression, 
slavery,  degradation,  exploitation." 

Marx  Twists  Theory  of  Mcdthus. — Marx,  it 
is  true,  ridicules  the  Malthusian  theory  of  pop- 
ulation. It  would  be  disastrous  to  socialist 
theory  to  admit  it.  If  population  must  increase 
with  every  improvement  in  economic  conditions, 
the  realization  of  the  socialist  ideal  will  only  re- 
sult in  greater  population  and  more  hopeless 
misery.  Marx,  therefore,  rejects  the  theory  of 
population,  but  accepts  the  iron  law  of  wages. 
He  denies  the  cause  while  affirming  the  effect. 
The  effect,  then,  must  be  due  to  some  other 
cause. 

It  is  not,  says  Marx,  absolute  overpopulation 
that  depresses  wages,  but  the  very  nature  of 
capitalistic  development  which,  by  the  continual 
introduction  of  machinery  and  other  improved 
methods  of  production,  creates  a  relative  surplus 
population,  an  industrial  reserve  army,  the  army 
of  the  unemployed,  who  are  willing  to  work  for 
any  wages  that  will  save  them  from  starvation. 
Thus  we  have,  according  to  Marx,  "a  law  of 

i  Capital,  p.  661, 


90  MARXIAN  LAW  or  MISERY 

population  peculiar  to  the  capitalistic  mode  of 
production." 

Pessimism  and  Optimism  of  Marx.  — This 
variation  of  the  iron  law  is  even  more  pessimistic 
than  the  views  of  Malthus  and  Kicardo.  Not 
only  may  there  be  a  population  too  great  for  the 
resources  of  a  country,  but  there  must  always  be, 
in  every  progressive  country,  an  active  army  of 
workers  who  receive  starvation  wages,  and  a  re- 
serve army  of  the  unemployed  ever  ready  to 
step  into  their  shoes. 

Such  is  the  celebrated  "law"  of  increasing 
misery,  according  to  which  economic  "progress" 
necessarily  involves  the  progressive  degradation 
of  the  working  class  and  increasing  exploitation 
by  a  diminishing  number  of  capitalists.  It  is  one 
of  the  foundation  stones  of  the  Marxian  system 
because  upon  it  is  based  the  central  doctrine,  the 
theory  of  surplus  value,  and  the  socialists'  hope 
of  approaching  revolution.  Fortunately,  it  is 
theoretically  unsound,  and  it  is  contradicted  by 
the  facts  of  history. 

Socialists  frequently  glorify  the  past,  especial- 
ly the  far-distant  past  of  our  primitive  ancestors, 
when  there  was  neither  business  enterprise,  nor 
machinery,  nor  exploitation,  neither  capitalists, 
feudal  lords  nor  slave  owners,  when  people  were 
near  to  nature  and  every  man  did  what  seemed 
good  in  his  own  eyes.  They  forget  that  in  those 


MARXIAN  LAW  OF  MISERY  91 

days  man  was  engaged  in  a  terrific  struggle  with 
nature,  that  nature  killed  most  of  those  who  were 
born,  and  that,  as  the  philosopher  Hobbes  well 
said,  the  life  of  man  in  the  primitive  social  order 
was  "poor,  mean,  nasty,  brutish,  and  short." 

Socialists  also  like  to  dwell  upon  economic  life 
in  the  Middle  Ages  and  the  early  modern  period, 
before  the  Industrial  Revolution  brought  ma- 
chinery into  the  world  and  all  the  evils  that  came 
in  its  train.  With  Thorold  Rogers,  they  speak  of 
the  fifteenth  century  as  the  "golden  age  of  the 
English  laborer,"  forgetting  the  famines  and 
diseases  which  plagued  him,  his  coarse  food,  his 
miserable  clothing  and  shelter,  and  the  fearful 
death  rate  which  kept  the  population  of  England 
below  3,000,000;  whereas  now,  largely  because 
of  machinery  and  modern  science,  that  country 
supports  about  34,000,000  people. 

Earlier  Conditions  of  Working  Class. — Of 
that  very  time  the  historian  Cunningham  says: 
"In  so  far  as  regularity  of  employment  and  short 
hours  are  a  test  of  the  well-being  of  the  work- 
man, the  fifteenth-century  day-laborer  was  badly 

off and  the  masses  of  the  population 

were  not  only  poor,  but  also  miserable."  * 

Similarly,  Sir  Walter  Scott,  writing  of  leprosy 
in  Scotland,  a  disease  now  unknown  there,  says: 

iW.  Cunningham,  The  Growth  of  English  Industry  and  Com- 
merce, Vol.  I,  pp.  349,  350. 


92  MARXIAN  LAW  OF  MISERY 

"Filth,  poorness  of  living,  and  the  want  of  linen, 
made  this  horrible  disease  formerly  very  common 
in  Scotland;  Robert  Bruce  died  of  the  leprosy."  x 

Similar  conditions  existed  at  the  beginning  of 
the  seventeenth  century.  In  the  year  1615  a 
census  was  taken  of  the  town  of  Sheffield,  show- 
ing that,  out  of  a  population  of  2,207,  no  less 
than  725  people  were  unable  to  live  without  the 
charity  of  their  neighbors,  while  60  per  cent  of 
the  remainder  were  so  poor  that  "a  fortnight's 
sickness  would  drive  them  to  beggary."  2 

In  the  year  1688  it  was  calculated  by  Gregory 
King  that  out  of  England's  total  population  of 
5,500,000,  about  a  fourth  were  more  or  less  de- 
pendent on  parochial  relief.  Writing  of  the  con- 
dition of  affairs  on  the  eve  of  the  Industrial 
Revolution,  Cunningham  says:  "There  seems  to 
be  abundant  evidence  that  the  artisan  of  a  hun- 
dred years  ago  was  less  regular  in  his  work,  and 
less  steady  in  character  than  the  skilled  artisan  of 
the  present  day.  .  .  .  The  first  introduction 
of  machinery  was  accompanied  by  many  evils, 
but  in  so  far  as  it  tended  toward  regular  habits 
of  daily  work  it  has  been  eventually  beneficial." 

Changes  in  the  Condition  of  Workers. — The 
eminent  British  statistician,  Sir  Robert  Giffen, 

i' Scott,  Minstrelsy  of  the  Scottish  Border.    Note  on  the  Ballad 
of  Sir  Hugh  Le  Blond. 

2  W.  Cunningham,  op.  cit.,  Vol.  II,  p.  206,  n. 
Vol.  II,  pp.  474,  475. 


MARXIAN  LAW  OF  MISERY  93 

in  1883  showed  that  the  money  wages  of  British 
workmen  had  increased  in  50  years  "in  most  cases 
from  50  to  100  per  cent,"  while  the  cost  of  living 
had  decreased,  except  in  regard  to  meat  and  rent. 

Another  authority,  Mr.  A.  L.  Bowley,  has 
shown  that,  in  the  30  years  ending  1891,  wages 
in  England  increased  from  15  to  76  per  cent, 
being  an  average  increase  of  40  per  cent. 

In  the  35  years  ending  1895,  according  to 
Mulhall,  the  population  of  the  United  Kingdom 
increased  from  29,000,000  to  39,000,000,  or  34 
per  cent,  while  in  the  same  time  the  total  wealth 
increased  from  $34,992,000,000  to  $57,348,000,- 
000,  or  64  per  cent,  and  the  wealth  per  head  in- 
creased from  $1,210  to  $1,458,  or  20  per  cent. 
If,  then,  average  wages  have  increased  40  per 
cent,  while  average  wealth  has  increased  only  20 
per  cent,  the  improvement  of  the  working  classes 
in  Great  Britain  in  those  years  more  than  kept 
pace  with  the  increase  in  general  wealth. 

Similar  testimony  is  given  by  the  well-known 
socialists,  Sidney  and  Beatrice  Webb,  who,  in 
their  great  work,  "Industrial  Democracy,"  show 
that  from  1850  to  1896  the  purchasing  power  of 
the  wages  of  three  typical  workmen  in  England 
and  Scotland,  measured  in  bushels  of  wheat,  in- 
creased by  80  per  cent,  160  per  cent  and  250  per 
cent  respectively.  In  the  Preface  to  Hutchins 
and  Harrison's  "History  of  Factory  Legisla- 


94  MARXIAN  LAW  OF  MISERY 

tion,"  written  in  1910,  Mr.  Webb  says:  "The 
Lancashire  cotton  spinner,  once  in  the  lowest 
depths  of  social  degradation,  now  occupies,  as  re- 
gards the  general  standard  of  life  of  a  whole 
trade,  perhaps  the  foremost  position  among 
English  wage-earners."  * 

Professor  Alfred  Marshall,  in  his  "Principles 
of  Economics"  (1907)  states  that,  since  1873, 
"the  standard  of  living  among  the  working 
classes  has  been  rising  rapidly,  perhaps  more 
rapidly  than  at  any  other  time  in  English  history ; 
their  household  expenditure,  measured  in  money, 
has  remained  about  stationary,  and,  measured  in 
goods,  has  increased  very  fast."  2 

Many  other  figures  could  be  given  to  show  that 
the  condition  of  the  working  class  in  England 
during  the  'nineties,  and  up  to  the  outbreak  of 
the  World  War  in  1914,  was  vastly  better  than 
ever  before.  All  the  evidence,  therefore,  flatly 
contradicts  the  so-called  "law"  of  increasing 
misery.  True,  improvement  went  on  at  a  slower 
rate  during  the  early  years  of  the  20th  century, 
because  of  the  well-known  tendency  of  wages  to 
lag  behind  rising  prices,  but  even  so,  the  gains  of 
the  latter  half  of  the  19th  century  were  well 
maintained,  and  prospects  were  good  when  the 
war  began. 

i  Cited  in  Towler  and  Ray,  Socialism,  p.  286. 

a  Marshall,  Principles  of  Economics,  fifth  edition,  p.  191. 


MARXIAN  LAW  OF  MISERY  95 

Labor  Conditions  in  the  United  States. — The 
history  of  labor  conditions  in  the  United  States 
tells  the  same  tale,  though  with  local  variations. 
It  is  easy  to  idealize  the  independence  of  the 
colonial  pioneers,  but,  as  Professor  Warner  Fite, 
of  Princeton  University,  says,  "The  good  old 
days,  especially  our  own  pioneer  days,  were 
mainly  days  of  privation,  of  unremitting  toil 
for  the  bare  necessities  of  life;  days,  not  of 
spiritual  leisure,  but  of  abject  slavery  to  the 
needs  of  the  body."  * 

McMaster,  in  his  "History  of  the  People  of 
the  United  States,"  gives  a  most  interesting 
account  of  a  typical  American  laborer's  life  at 
the  close  of  the  Revolution.  He  writes:  "Sand 
sprinkled  on  the  floor  did  duty  as  a  carpet.  There 
was  no  glass  on  his  table,  there  was  no  china  in 
his  cupboard,  there  were  no  prints  on  his  wall, 
what  a  stove  was  he  did  not  know,  coal  he  had 
never  seen,  matches  he  had  never  heard  of.  ... 
He  rarely  tasted  fresh  meat  as  often  as  once  a 
week,  and  paid  for  it  a  much  higher  price  than 
his  posterity.  ...  If  the  food  of  an  artisan 
would  now  be  thought  coarse,  his  clothes  would 
be  thought  abominable."  2 

Adams  and  Sumner,  in  a  chapter  on  "The 

1  Warner  Fite,  The  Old  Individualism  and  the  New  Situation, 
in  Friedman's  America  and  the  New  Era,  p.  100. 

2  J.  B.  McMaster,  History  of  the  People  of  the  United  States, 
Vol.  I,  pp.  96-97. 


96  MAKXIAN  LAW  or  MISERY 

Material  Progress  of  Wage-Earners,"  state  that 
in  Massachusetts,  in  the  year  1672,  carpenters 
received  33  cents  a  day,  tailors  27  cents,  and 
common  laborers  27  cents,  without  board,  and 
that  when  wheat  was  selling  at  81  cents  a  bushel, 
corn  at  48  cents,  and  oats  at  25  cents. 

The  same  authors  show  that  the  rise  in  "real" 
wages,  or  wages  measured  in  purchasing  power, 
went  on,  despite  occasional  interruptions,  until 
the  beginning  of  the  20th  century.  For  every 
$70  worth  of  goods  that  the  worker  received  in 
1866  he  received  $121  in  1902,  an  increase  of  73 
per  cent  in  36  years.1 

W.  I.  King's  Findings. — W.  I.  King,  in  his 
excellent  book,  "The  Wealth  and  Income  of  the 
People  of  the  United  States"  (1915),  gives  a 
series  of  index  numbers  showing  the  purchasing 
power  of  hourly  wages  in  all  industries  from 
1850  to  1912.  If  the  number  46.8  be  taken  to 
indicate  the  purchasing  power  of  an  hour's 
wages  in  the  year  1850,  the  purchasing  power 
was  48.1  in  1860,  58.2  in  1870,  69.9  in  1880,  94.9 
in  1890,  104.8  in  1897,  101.6  in  1900,  110  in 
1906,  and  103  in  1912.2  Here,  also,  as  in  the  case 
of  England  and  other  countries,  the  rise  in  "real" 
wages  during  the  early  years  of  the  20th  century 
was  retarded  because  of  the  rise  in  the  cost  of 

i  Adams  and  Simmer,  Labor  Problems,  Chap.  13,  pp.  502-547. 
2W.  I.  King,   The  Wealth  and  Income  of  the  People  of  the 
United  States,  p.  189. 


MARXIAN  LAW  OF  MISERY  97 

living,  the  increase  of  population  and  other 
causes. 

Of  course,  the  progress  of  the  working  class 
is  not  to  be  measured  in  wages  alone,  as  many 
other  circumstances  must  be  considered.  The 
death-rate,  for  example,  per  thousand  persons,  in 
England  and  Wales,  declined  from  20.8  in  the 
year  1850  to  15.2  in  the  year  1905,  which  is  surely 
no  evidence  of  "increasing  misery." 

The  disappearance  of  illiteracy,  too,  is  worth 
considering;  also  the  development  of  public 
parks,  playgrounds,  libraries,  baths  and  other 
signs  of  increasing  well-being. 

Nor  is  such  progress  confined  to  England  and 
the  United  States.  It  is  found  in  all  the  other 
capitalistic  countries  of  the  world.  Only  in  de- 
clining countries,  and  in  non-capitalistic  coun- 
tries, such  as  China,  India  and  Central  Africa, 
are  wages  kept  down  to  the  bare  cost  of  living. 
In  such  countries  it  looks  as  though  the  law  of 
Malthus  were  in  operation,  but  in  capitalistic 
countries  national  wealth  seems  to  increase  faster 
than  population,  and  there  is  no  other  "law"  of 
increasing  misery  which  the  working  class  has  to 
fear. 

Admissions  of  Socialists. — It  might  seem  use- 
less to  dilate  upon  this,  were  it  not  that  socialist 
missionaries  still  preach  the  "law"  of  increasing 


MARXIAN  LAW  OF  MISERY 


misery,  as  though  they  did  not  know  that  their 
leaders  had  abandoned  it  or  explained  it  away. 

Kautsky  said  at  the  Liibeck  Congress  of  1901 : 
"Increasing  misery  is  to  be  understood  only  as  a 
tendency,  and  not  as  an  unconditional  truth."  * 

In  reply  to  him,  Dr.  David,  a  progressive 
socialist,  said:  "If  one  alters  one's  opinion  one 
should  have  the  courage  and  strength  to  say, 
'We  made  a  mistake.'  "  2 

In  reply  to  both  Kautsky  and  David,  Bebel 
asserted  that  Marx  never  taught  the  theory  of  in- 
creasing misery,  but  only  the  doctrine  that  "the 
gap  between  the  working  class  and  the  rich  class 
today  is  greater  than  ever  before,"  and  that  for 
this  reason  the  class  struggle  is  ever  growing 
more  intense  and  bitter. 

Marx  himself,  in  1864,  admitted  the  beneficial 
effects  of  the  English  ten-hour  law,  thus  contra- 
dicting his  own  theory  of  the  inevitable  and  pro- 
gressive degradation  of  the  working  class  under 
capitalism — this  while  he  was  writing  his  great 
work,  "Capital,"  which  appeared  in  1867. 

Even  Boudin  abandons  his  guns  when  he  says: 
"The  present  condition  of  the  working  class  is 
not  merely  the  result  of  the  tendencies  of  capi- 
talistic accumulation,  but  of  the  tendencies  of 

1  Cf.  Ensor,  Modern  Socialism,  pp.  187-189. 

2  Ibid. 


MARXIAN  LAW  OF  MISERY  99 

capitalistic  accumulation  as  modified  by  the 
struggle  of  organized  labor  against  them." 

Franz  Mehring,  a  German  Marxist,  says  that 
the  theory  of  increasing  misery  is  but  a  relic  in- 
herited by  Marx  from  the  bourgeois  political 
economy.  Spargo  and  Arner  freely  admit  that 
"some  of  the  evils  of  poverty  can  be  relieved 
without  disturbing  the  present  social  order." 
Finally,  Laidler,  in  his  "Socialism  in  Thought 
and  Action"  (1920),  suggests  that  misery  is  a 
"psychic  condition,"  and  sums  up  the  general 
conclusion  thus:  "Most  modern  socialists  do  not 
claim  that  the  physical  degradation  of  the 
worker  is  becoming  increasingly  greater,  but 
that  the  worker's  recognition  of  injustices  is  in- 
creasing while  his  share  in  society's  product  is 
decreasing."  2 

Marxism  With  Marx  Left  Out. — Comment- 
ing on  these  fatal  admissions,  Simkhovitch  says : 
"And  yet  the  true-blue  Marxists  are  unwilling 
to  drop. this  theory.  They  realize  that  in  drop- 
ping it  they  are  dropping  Marxism,  but  they  do 
not  realize  that  in  interpreting  it  away  they  are 
interpreting  Marxism  away.  The  whole  con- 
struction of  Marx's  'Capital'  leads  up  to  the 
doctrine  of  increasing  misery.  In  rejecting  this 
theory  one  rejects  also  Marx's  theory  of  popula- 

i  Boudin,  The  Theoretical  System  of  Karl  Marx,  p.  228. 
2H.  W.  Laidler,  Socialism  in  Thought  and  Action,  p.  111. 


100  MARXIAN  LAW  OF  MISERY 

tion,  his  theory  of  wages,  his  theory  of  accumula- 
tion of  capital.  And  if  what  is  left  be  Marxism 
it  is  Marxism  with  Marx  left  out.  Not  only  is 
his  theory  shattered,  but  what  rational  founda- 
tion is  there  left  for  his  vision  and  hope,  his  goal 
and  inspiration — the  breakdown  of  capitalism 
and  the  social  revolution?  These  conceptions  of 
Marx,  as  well  as  his  idea  of  the  general  crisis  are 
based  upon  the  progressively  increasing  misery 
of  the  working  class."  * 

Inconsistency  of  Socialists. — But  why  should 
socialists  wish  to  uphold  the  law  of  increasing 
misery?  If  the  working  class  are  daily  and 
yearly  sinking  deeper  into  the  slough  of  misery 
and  degradation,  what  hope  can  there  be  of  their 
ever  getting  out  of  it?  It  is  freemen,  and  not 
slaves,  who  most  desire  the  blessings  of  liberty. 
The  working  class  of  civilized  countries,  like  pro- 
gressive people  everywhere,  are  never  satisfied. 
The  more  they  have,  the  more  they  want,  for 
desires  always  outrun  the  means  of  satisfaction. 
Kautsky  says :  "We  all  agree  that  the  emancipa- 
tion of  the  proletariat  is  to  be  expected,  not  from 
its  increasing  decadence,  but  from  its  growing 
strength." 

But  if  socialists,  having  ceased  to  believe  in  in- 
creasing misery,  take  comfort  in  the  improve- 
ment of  the  working  class,  much  more  should 

i  Simkhovitcbj   Marxism  versus  Socialism,  p.   127. 


MARXIAN  LAW  OF  MISERY  101 

T— r-r-4 -.r—r 

those  be  encouraged  who  hope  that  industrial 
evolution  will  bring  about,  not  the  destruction  of 
private  property  and  private  enterprise,  but  the 
continual  and  beneficent  utilization  of  those 
powerful  forces,  which  have  had  so  much  to  do 
with  the  creation  of  modern  civilization. 


VI 

THE  MARXIAN  THEORY  OF 
SURPLUS  VALUE 

The  theory  of  surplus  value  is  a  combination 
or  synthesis  of  the  labor-cost  theory  of  value  and 
the  "law"  of  increasing  misery.  It  is,  therefore, 
the  third  link  in  the  chain  of  argument  designed 
to  prove  that  capitalism  is  a  system  of  exploita- 
tion or  robbery  and  has  within  it  the  seeds  of 
its  own  destruction,  chiefly  because  of  the  class 
struggle  thereby  engendered. 

It  is  the  working  class,  of  course,  that  is  sup- 
posed to  be  exploited,  and  this  includes  all  em- 
ployees, unskilled  and  skilled,  hard-handed  and 
soft-handed,  working  with  hand  and  brain,  for 
wages  and  salaries.  Yet  Marx  usually  seems  to 
have  in  mind  "unskilled  average  labor,"  furnished 
by  the  proletariat,  who  have  "nothing  to  lose 
but  their  chains."  They  are  the  chief  victims  of 
the  capitalists,  to  whom  they  sell  their  sole  pos- 
session, their  labor,  and  always  at  a  forced  sale. 
This  is  his  definition  of  labor  power:  "By  labor- 
power  or  capacity  for  labor  is  to  be  understood 
the  aggregate  of  those  mental  and  physical 

102 


MARXIAN  THEORY  OF  SURPLUS  VALUE     103 

capabilities  existing  in  a  human  being,  which  he 
exercises  whenever  he  produces  a  use  value  of 
any  description."  * 

The  typical  exploiter,  then,  is  an  employer  of 
labor,  especially  a  manufacturer,  and  surplus 
value  is  the  difference  in  value  between  what  the 
laborers  create  and  what  they  receive  as  wages, 
the  assumption  being  that  the  whole  product  of 
industry  is  created  by  them  alone. 

A  Concrete  Example. — Take,  for  example, 
a  manufacturer  of  bricks,  employing  100  labor- 
ers in  a  rather  old-fashioned  brick-yard.  He 
pays  the  laborers  the  market  value  of  their 
services,  which,  according  to  the  law  of  increasing 
misery,  is  barely  enough  for  the  subsistence  of 
themselves  and  their  families  at  some  low  stand- 
ard of  living — say  $60  per  laborer  per  month, 
making  $6,000  for  the  whole  force.  The  bricks, 
however,  after  deducting  the  cost  of  materials 
and  other  costs,  sell  for  $12,000.  The  difference 
of  $6,000  available  for  rent,  interest,  dividends 
and  surplus,  is  regarded  by  Marx  as  surplus 
value,  stolen  from  the  laborers  who  created  it. 

If  we  ask  why  the  bricks  sell  for  $12,000, 
although  the  labor-cost  measured  in  money  was 
only  $6,000,  Marx  replies  that  the  value  of  the 
bricks  does  not  depend  on  wages  and  other  ex- 
penses of  production,  but  on  the  average  number 

i  Capital,  p.  145. 


104     MARXIAN  THEORY  OF  SURPLUS  VALUE 

of  hours  of  "socially  necessary  labor-time"  em- 
ployed in  their  production.  Moreover,  labor 
power,  Marx  says,  has  the  "peculiar  property  of 
being  a  source  not  only  of  value,  but  of  more 
value  than  it  has  itself."  The  employer  thus  has 
the  great  advantage  of  buying  labor-power  at 
its  value  and  yet  selling  a  product  the  value  of 
which  is  much  greater,  probably  two  or  three 
times  as  great. 

Labor  and  Capital. — The  labor  day,  therefore, 
is  composed  of  two  parts:  "necessary  labor-time," 
in  which  the  laborer  creates  value  enough  for 
subsistence  wages,  and  "surplus  labor-time"  in 
which  surplus  value  is  created.  The  laborer,  like 
the  serf  of  feudal  times,  works  part  of  the  time, 
say  five  hours,  for  himself,  and  the  rest  of  the 
day  for  his  master,  the  robber  baron  of  cap- 
italism. 

The  employer's  capital,  too,  is  composed  of 
two  parts:  "variable  capital,"  consisting  of 
money  or  goods  paid  to  labor;  and  "constant 
capital,"  consisting  chiefly  of  buildings,  ma- 
chinery and  raw  materials.  Now,  since  surplus 
value  is  derived  from  the  exploitation  of  living 
labor,  it  follows  that  it  must  be  proportional  to 
the  quantity  of  variable  capital  used  in  the  busi- 
ness, and  not  to  the  quantity  of  constant  capital. 
Constant  capital,  says  Marx,  merely  creates  its 
own  value,  because  it  is  the  product  of  past  labor, 


MARXIAN  THEORY  OF  SURPLUS  VALUE     105 

whereas  living  labor  only  has  the  "peculiar 
power"  of  creating  surplus  value. 

Yet  there  may  be  in  the  same  business  another 
manufacturer  who,  with  a  better  plant,  employs 
only  50  laborers  at  a  cost  of  $3,000  per  month, 
spends  another  $3,000  on  account  of  superior 
equipment,  but  makes  the  same  profit  of  $6,000 
through  a  totally  different  arrangement  or  com- 
position of  his  capital.  In  other  words,  a  given 
capital  could  be  invested  so  as  to  use  much  labor 
and  little  machinery,  or  little  labor  and  much 
machinery,  and  might  yield  the  same  rate  of 
profit  on  the  total  capital  employed,  although  it 
would  probably  yield  a  higher  rate  of  profit  than 
the  old-fashioned  concern. 

What,  then,  becomes  of  the  theory  of  value  if 
profits  tend  to  be  an  average  return  upon  the 
whole  capital  invested,  instead  of  a  return  pro- 
portional to  the  amount  of  variable  capital  only, 
or  to  the  number  of  laborers  directly  employed? 
Obviously,  in  the  first  case  the  rate  of  exploita- 
tion is  100  per  cent,  and  in  the  second  case  200 
per  cent ;  that  is  to  say  that  in  the  second  case  50 
laborers  create  as  much  surplus  value  as  the  other 
100,  although  they  all  were,  presumably,  men  of 
average  labor  power.  To  the  ordinary  mind  it 
looks  as  though  half  of  the  profits  in  the  second 
case  were  due  to  the  employer's  intelligence,  but 
Marx  could  not  admit  this  without  abandoning 


106     MARXIAN  THEORY  OF  SURPLUS  VALUE 

his  theory  that  all  value  is  created  by  labor  alone. 

Marx's  Celebrated  Puzzle. — This  is  the  cele- 
brated puzzle  suggested  by  Marx  in  the  first  vol- 
ume of  "Capital"  and  which  was  to  be  explained 
in  the  later  volumes.  In  the  year  1885,  two  years 
after  the  death  of  Marx,  Friedrich  Engels  chal- 
lenged his  critics  to:  "show  how  an  equal  aver- 
age rate  of  profit  can  and  must  come  about,  not 
only  without  a  violation  of  the  law  of  value,  but 
by  reason  of  it."  * 

The  third  volume  of  "Capital"  appeared  in  the 
year  1894,  when  orthodox  Marxians  were  sur- 
prised and  disconcerted  to  find  that  Marx  ad- 
mitted that  commodities  in  actual  circulation  ex- 
change, not  at  their  value,  but  in  accordance  with 
their  "price  of  production,"  that  is,  cost  price 
plus  the  average  rate  of  profit.  This  is  the 
"great  contradiction"  pointed  out  by  Bohm- 
Bawerk  and  other  critics,  and  it  is  evident  that 
Marx,  finding  his  two  theories  quarreling  with 
one  another,  and  wishing  to  save  the  theory  of 
surplus  value,  threw  the  labor-cost  theory  over- 
board. 

Without  going  into  the  disputes  and  hair- 
splittings that  have  centered  about  this  notorious 
puzzle,  it  must  be  evident  to  any  business  man 
who  considers  the  matter  that  the  profits  of  brick- 

i  Capital,  Vol.  II,  Preface  by  Friedrich  Engels.  Cf.  Bohm- 
Bawerk,  Karl  Marx  and  the  Close  of  His  System,  p.  25. 


MARXIAN  THEORY  OF  SURPLUS  VALUE     107 

making,  or  of  any  other  competitive  business,  are 
not  determined  by  the  amount  of  variable  capital 
used,  nor  by  the  number  of  laborers  employed, 
but  rather  and  chiefly  by  the  skill  and  courage 
and  leadership  of  the  captains  of  industry  who 
launch  the  ships  of  business  and  who,  by  constant 
attention  and  unremitting  vigilance,  keep  them 
above  water  as  going  concerns. 

According  to  Marx,  the  business  man  is  a  mere 
exploiter  and  parasite,  whereas  he  is,  in  fact,  the 
very  mainspring  of  industrial  activity.  Pro- 
fessor Skelton  well  says:  "One  of  the  most 
astounding  gaps  in  the  Marxian  theory  is  the  al- 
most total  neglect  of  the  function  of  the  entre- 
preneur in  modern  industry,  in  seeking  out  the 
opportunities  for  development,  in  bringing  to- 
gether the  various  requisites  of  production,  in 
the  direction  of  operations  and  marketing  the 
product."  l 

Moreover,  it  is  not  true  that  labor  power,  as 
Marx  says,  has  the  "peculiar"  or  magic  power  of 
creating  surplus  value,  as  thousands  of  unsucces- 
ful  capitalists  and  employers  know  to  their  cost. 
If  that  were  true,  the  most  incompetent  employer 
could  make  money,  although  competition  would 
soon  take  it  all  away  and  give  it  to  the  magic- 
working  laborers.  Undirected  or  misdirected 
labor  creates  no  surplus  value,  even  when  com- 

i  0.  D.  Skelton,  Socialism,  a  Critical  Analysis,  p.  128. 


108     MARXIAN  THEORY  OF  SURPLUS  VALUE 

bined  with  abundance  of  capital,  both  variable 
and  constant. 

Commercial  Capital. — It  should  be  noted,  in 
passing,  that  the  theory  of  surplus  value  quite 
fails  to  explain  the  origin  and  nature  of  commer- 
cial capital,  as  Marx  himself  admits.  Referring 
to  a  transaction  in  which  a  merchant  buys  goods 
for  $100  and  sells  them  for  $110,  Marx  says: 
"This  increment  or  excess  over  the  original  value 
I  call  surplus  value,"  *  but  he  is  unable  to  explain 
how  the  surplus  value,  in  this  case,  is  created, 
except  by  suggesting  that  a  two-fold  advantage 
over  both  buyer  and  seller  is  gained  by  the  mer- 
chant, "who  parasitically  shoves  himself  in  be- 
tween them."  2 

When  Marx  says,  in  effect,  that  merchants  are 
thieves,  he  ignores  the  important  social  service 
which  they  render  in  the  creation  of  time  and 
place  utilities.  In  fact,  the  merchant  is  a  pro- 
ducer as  truly  as  the  farmer,  the  miner,  the 
fisherman,  or  the  manufacturer,  for  the  process 
of  production  is  not  completed  until  the  goods 
are  in  the  hands  of  the  final  consumler.  As 
though  quite  unaware  of  this,  Marx  says:  "If 
commodities  or  commodities  and  money,  of  equal 
exchange-value,  and  consequently  equivalents, 
are  exchanged,  it  is  plain  that  no  one  abstracts 
more  value  from,  than  he  throws  into,  circulation. 

i  Capital,  p.  128.  2  Hid.,  6141. 


MARXIAN  THEORY  or  SURPLUS  VALUE     109 

There  is  no  creation  of  surplus  value.  Turn  and 
twist  them  as  we  may,  the  fact  remains  unaltered. 
If  equivalents  are  exchanged,  no  surplus  value 
results,  and  if  non-equivalents  are  exchanged, 
still  no  surplus  value.  Circulation,  or  the  ex- 
change of  commodities,  begets  no  value."  l 

Nor  can  the  theories  of  Marx  explain  the 
nature  of  banking,  nor  the  creative  power  of 
credit.  To  him  the  making  of  loans  and  the  tak- 
ing of  interest  have  nothing  to  do  with  the 
creation  of  value,  except  in  that  they  involve 
taking  what  others  have  produced.  He  even 
quotes  with  approval  the  ancient  error  of  the 
Greek  philosopher  Aristotle,  who  held  that  the 
taking  of  interest,  unlike  the  rent  of  land  and 
the  increase  of  cattle  or  sheep,  was  contrary  to 
nature  because  money  was  barren. 

All  this  confusion  of  thought  evidently  pro- 
ceeds from  the  basic  assumption  of  Marx  that 
all  values  are  materialized  or  congealed  or 
crystallized  labor-time,  from  which  it  is  inferred 
that  capitalists  and  employers  create  nothing. 
Many  socialists  admit  that  the  basic  assumption 
is  false,  yet  still  hold  to  the  opinion  that  capital- 
ism, with  exploitation  as  its  ruling  principle,  con- 
tains within  it  the  seeds  of  its  own  destruction. 
Unless  the  wish  is  father  to  the  thought,  such  an 
opinion,  lacking  scientific  basis,  is  probably  trace- 

i  Capital,  p.  141. 


110    MARXIAN  THEORY  or  SURPLUS  VALUE 

able  to  discontent  arising  from  the  unequal  dis- 
tribution of  wealth. 

Distribution  of  Wealth.  —  Certainly,  the 
wealth  of  the  world  is  not  equally  divided,  and 
socialists  are  quick  to  infer  that  a  distribution 
so  unequal  must  be  inequitable  as  well.  Pro- 
fessor W.  I.  King,  in  "The  Wealth  and  Income 
of  the  People  of  the  United  States"  (1915), 
estimates  that  the  richest  2  per  cent  of  the  people 
of  Wisconsin  in  the  year  1900  owned  57  per  cent 
of  the  total  wealth,  and  that  in  the  United  King- 
dom, France,  and  Prussia  in  the  year  1909,  the 
corresponding  figures  were  71  per  cent,  60  per 
cent,  and  59  per  cent,  respectively.  Doubtless, 
the  wealth  of  all  capitalistic  and  most  non-capi- 
talistic countries  is  highly  concentrated."  * 

Fortunately,  the  incomes  of  the  people,  which 
control  their  expenditure,  are  more  evenly  dis- 
tributed. In  the  same  book  Professor  ;King 
estimates  that  in  the  year  1910  the  total  income 
of  the  people  of  the  United  States  was,  in  round 
numbers,  $30,500,000,000,  of  which  wages  and 
salaries  amounted  to  $14,300,000,000,  or  46.9 
per  cent,  while  interest  was  16.8  per  cent,  rent 
8.8  per  cent  and  business  profits,  distributed  and 
undistributed,  were  27.5  per  cent. 

This  is  a  marked  improvement  over  the  year 
1850,  when  the  share  of  wages  and  salaries  was 

iKing,  op.  cit.,  pp.  79,  96. 


MARXIAN  THEORY  OF  SURPLUS  VALUE     111 

but  35.8  per  cent  of  the  total  national  income, 
and  profits  absorbed  no  less  than  44  per  cent. 
The  relative  share  of  employees  increased 
steadily  until  the  year  1890  when  it  was  53.5  per 
cent  of  the  total  national  income,  since  when  it 
has  declined  slightly,  probably,  as  Professor 
King  believes,  because  of  the  enormou3  immigra- 
tion of  unskilled  labor  which  continued  until  the 
outbreak  of  the  war. l 

Of  course,  as  the  volume  of  capital  increases 
from  year  to  year,  the  proportion  of  the  total 
national  income  going  to  capital  as  interest 
should  increase,  as  must  be  clear  to  anyone  who 
considers  the  state  of  affairs  in  primitive  times, 
when  there  was  practically  no  capital  and  no 
interest.  In  those  days  labor  received  the  whole, 
though  a  very  scanty  whole,  of  the  product  of 
industry.  If,  again,  the  process  of  civilization 
could  be  reversed,  and  rent,  interest,  and  profits 
could  be  taken  away,  we  might  easily  go  back  to 
a  condition  in  which,  receiving  the  whole  product 
of  industry,  the  working  class  would  be  on  the 
verge  of  starvation.^ 

The  Share  of  Labor. — When  we  consider  the 
share  of  labor  in  particular  industries  we  find 
it  to  be  far  larger  than  most  socialists  are  willing 
to  admit.  Dr.  F.  H.  Streightoff  in  "The  Dis- 
tribution of  Incomes  in  the  United  States," 

iKing,  op.  tit.,  p.  160. 


112     MARXIAN  THEORY  OF  SURPLUS  VALUE 

(1912),  says:  "Recent  available  figures  for 
eight  large  American  industries,  employing  over 
three  million  laborers,  give  to  capital  a  return  in 
dividends  and  interest  of  $1,276,419,050,  and  to 
labor  in  salaries  and  wages  of  $2,031,402,210,  a 
total  income  of  $3,307,821,260,  of  which  the 
share  of  labor  is  sixty-one  per  cent,  and  that  of 
capital  thirty-nine  per  cent.  That  these  figures 
are  typical  of  the  whole  field  of  American  in- 
dustry is  questionable."  x 

The  most  recent  figures  on  this  subject  are 
those  of  Professor  Friday,  of  the  University 
of  Michigan,  in  "Profits,  Wages  and  Prices" 
(1920),  based  on  the  United  States  census  re- 
ports, in  which  he  states  that  the  employees  of 
mining,  manufacturing,  railroad  and  public  util- 
ity corporations  in  the  year  1913  received  63.9 
per  cent  of  the  "value  added"  by  these  industries, 
while  3.8  per  cent  went  in  taxes,  8.9  per  cent  in 
interest,  and  23.4  per  cent  in  dividends  and  sur- 
plus. Professor  Friday  says:  "The  assertion  so 
frequently  made  nowadays  that  only  20  or  25 
per  cent  of  the  nation's  output  goes  to  the  laborer 
as  wages  has  clearly  no  foundation  in  fact." 

A  typical  exaggeration  of  the  "degree  of  ex- 
ploitation" is  given  by  the  well-known  British 
socialist,  H.  M.  Hyndman,  in  "The  Economics 

1  Columbia  University  Studies,  Vol.  LIT,  No.  2,  p.  44. 

2  David  Friday,  Profits,  Wages  and  Prices,  p.  124. 


MARXIAN  THEORY  OF  SURPLUS  VALUE     113 

of  Socialism"  (1896).  He  says:  "The  worker, 
for  every  hour  he  works  for  himself,  works  three 
or  four  for  the  benefit  of  other  people  who  may 
or  may  not  do  any  useful  social  work  at  all."  1 

Conditions  in  the  United  Kingdom. — British 
as  well  as  American  statistics  absolutely  contra- 
dict this  and  similar  statements.  The  Census  of 
Industrial  Production  of  the  United  Kingdom 
(1907),  as  analyzed  by  Professor  A.  L.  Bowley, 
shows  that,  out  of  a  net  production  valued  at 
$3,100,000,000,  wages  and  salaries  amounted  to 
$2,000,000,000,  depreciation  and  taxes  absorbed 
$340,000,000,  and  the  share  of  capital,  in  rents, 
royalties  and  profits  was  less  than  $800,000,000. 
Thus,  for  every  $1.00  going  to  capital,  labor 
received  about  $2.50,  a  distribution  quite  the  re- 
verse of  that  imagined  by  Mr.  Hyndman.2 

Such  figures  as  these,  too,  are  quite  at  variance 
with  the  views  of  single-taxers  of  the  school  of 
Henry  George,  who  claim  that  all  the  benefits 
of  progress  are  absorbed  by  the  land  owner.  Pro- 
fessor King's  figures  show  that  in  the  year  1910 
only  8.8  per  cent  of  the  national  income  was 
taken  in  rent,  and  this  chiefly  by  the  small  land 
owners  so  common  in  the  United  States.  In  the 
United  Kingdom,  also,  where  large  estates  are 
the  rule,  the  portion  of  the  national  income  going 

1  Hyndman,  The  Economics  of  Socialism,  p.  85. 

2  Mallock,  Social  Reform,  p.  203. 


114     MARXIAN  THEORY  OF  SURPLUS  VALUE 

to  rent  is  relatively  small.  Mr.  W.  H.  Mallock, 
in  "Social  Reform"  (1914)  says:  "In  the  year 
1801  the  land-rent  of  England  and  Wales 
amounted  to  20  per  cent  of  a  total  income  of 
$870,000,000.  To-day  out  of  a  total  income  of 
more  than  $9,700,000,000  it  barely  amounts  to 
as  much  as  4  per  cent." 

The  Effect  of  Saving. — Finally,  in  estimating 
the  actual  consumable  income  of  the  capitalist 
class,  a  considerable  deduction  should  be  made 
from  their  money  income  on  account  of  corporate 
and  personal  savings.  This  part  of  income,  in- 
stead of  being  enjoyed  by  the  owners,  is  saved 
and  invested,  and  constitutes  a  sort  of  revolving 
fund,  most  of  which  goes  to  labor.  Professor 
King  makes  a  conservative  estimate  of  $2,000,- 
000,000  as  the  national  saving  for  the  year  1910. 
Professor  Friday  says  that  the  annual  savings 
of  England  and  Germany  were  generally  esti- 
mated at  $2,000,000,000  each  before  the  war, 
and  he  states  that  the  corporate  savings  of  the 
United  States  were  three-fourths  of  this  amount. 

If  to  these  corporate  savings  be  added  personal 
savings  out  of  distributed  income,  the  total  is 
probably  in  excess  of  the  savings  of  England  or 
Germany,  notwithstanding  the  fact  that  Ameri- 
cans, both  rich  and  poor,  are  most  improvident 
people.  Part  of  their  savings,  of  course,  come 
from  wages  and  salaries,  although  most  of  the 


MARXIAN  THEORY  OF  SURPLUS  VALUE    115 

saving  and  investment  is  done  by  the  rich  and 
the  well-to-do.  Indeed,  it  is  often  said,  and  with 
a  measure  of  truth,  that  there  would  be  far  less 
of  saving  and  more  of  spending  if  the  wage- 
earners  had  more  and  the  capitalists  less  of  the 
national  income.  Mr.  J.  M.  Keynes  says,  rather 
ironically:  "The  immense  accumulations  of 
fixed  capital  which,  to  the  great  benefit  of  man- 
kind, were  built  up  during  the  half  century  be- 
fore the  war,  could  never  have  come  about  in  a 
society  where  wealth  was  divided  equitably."1 

The  Nation's  Income. — After  all  deductions 
and  allowances  have  been  made,  it  still  remains 
true  that  a  considerable  part  of  the  nation's  in- 
come, probably  not  less  than  40  per  cent,  goes  to 
capitalists  large  and  small,  in  the  form  of  rent, 
interest  and  profits,  and  that  a  large  part,  though 
not  the  whole,  of  that  income  is  spent  by  them 
in  consumable  goods  and  services.  These  people, 
numbering  from  a  fifth  to  a  fourth  of  the  popula- 
tion, constitute  the  so-called  "exploiting"  class, 
while  the  remaining  four-fifths  or  three-fourths 
constitute,  roughly,  the  so-called  "exploited"  class 
or  "proletariat."  The  "proletariat,"  or  working 
class,  are  supposed  to  do  all  the  work,  while  the 
capitalists  live  as  parasites  on  the  ever-increasing 
mass  of  surplus  value.  Marx  says  "Capital  is 

i  J.  M.  Keynes,  The  Economic  Consequences  of  the  Peace,  p.  19. 


116    MARXIAN  THEORY  OF  SURPLUS  VALUE 

dead  labor,  that,  vampirelike,  lives  by  sucking 
living  labor."  * 

A  rough  classification  like  this  may  easily  lead 
to  false  conclusions,  if  one  thus  assumes  that  all 
capital  is  owned  by  capitalists  and  that  all  labor 
is  done  by  workers  of  the  propertyless  class.  In 
fact,  thousands  and  even  millions  of  American 
laborers  have  modest  savings  invested  in  some 
productive  way:  a  house,  a  piece  of  land,  a  small 
mortgage  or  bond,  an  insurance  policy,  a  de- 
posit in  a  savings  bank.  The  insecurity  of  their 
position  is  due  to  the  fact  that  they  have  so  little 
capital,  and  are  so  much  dependent  upon  a  single 
source  of  income — the  labor  of  their  hands. 

Statistics  of  savings  banks,  building  and  loan 
associations  and  insurance  companies,  while  they 
do  not  separate  the  holdings  of  wage-earners 
from  those  of  large  capitalists,  indicate  the  exist- 
ence of  a  large  number  of  small  property  owners. 
For  example,  in  the  year  1918  there  were  no  less 
than  11,379,553  depositors  in  the  savings  banks 
of  the  United  States,  and  their  aggregate  de- 
posits amounted  to  $5,471,579,949.  In  the  year 
1917  there  were  3,838,612  members  of  building 
and  loan  associations,  the  total  assets  of  which 
amounted  to  $1,769,142,175.  In  the  same  year 
there  were  11,581,701  life  insurance  policies  in 
force,  and  the  total  assets  of  the  companies  con- 

i  Capital  (Sonnenschein),  p.  216, 


MARXIAN  THEORY  OF  SURPLUS  VALUE     117 

cerned  were  $5,940,622,780.1  However,  the  to- 
tal property  holdings  of  the  working  class  are 
not  large,  for,  according  to  King,  the  poorer  65 
per  cent  of  the  population  of  Wisconsin  in  the 
year  1900  owned  but  5.2  per  cent  of  the  total 
wealth  of  the  state.2 

The  Capitalist  Class. — There  are  many  labor- 
ers who  are  capitalists,  though  in  a  small  way, 
and  it  is  equally  true  that  there  are  many  capital- 
ists who  are  workers  and  creators  of  wealth. 
Capitalists  are  of  two  classes:  those  who  are  ac- 
tively engaged  in  business,  and  those  who  have 
retired  from  business  or  have  never  entered  it. 
The  latter  class  is  composed  of  administrators  of 
estates  and  benevolent  endowments,  retired  busi- 
ness men  and  men  of  leisure,  widows,  orphans, 
professional  people,  and,  in  general,  people  of 
the  middle  class,  who,  owning  more  or  less 
capital,  and  unable  or  unwilling  to  manage  it 
profitably,  put  it  into  safe  investments  at  low 
rates  of  interest. 

The  former  class,  on  the  other  hand,  is  made 
up  of  active  capitalists,  young  men  and  men  in 
the  prime  of  life,  using  their  own  capital  and  that 
of  others  in  the  management  and  promotion  of 
enterprises  old  and  new,  taking  all  the  risks  of 
business,  guaranteeing  interest  to  the  bondholder 

1  Statistical  Abstract  of  the  U.  S.,  1918. 

2  King,  op.  cit.,  p.  79. 


118     MAKXIAN  THEORY  OE  SURPLUS  VALUE 

and  wages  to  the  laborer,  bearing  the  losses  that 
occur,  and  taking  to  themselves  the  lion's  share 
of  the  profits.  Farmers  are  men  of  this  class ;  so 
also  are  manufacturers  and  merchants,  bankers 
and  brokers,  and  the  small  but  influential  class 
of  people  who  control  the  railways,  telegraph 
companies,  and  other  great  business  corporations. 

According  to  King,  these  people,  together 
with  the  stockholders  who  back  them  up  and 
share  the  risk,  received  in  the  year  1910  about 
$8,400,000,000,  and  the  land  owners,  perhaps  the 
least  active  of  all,  received  only  $2,700,000,000 
out  of  the  total  national  income  of  about 
$30,000,000,000. 

How  can  it  be  said  that  the  active  business 
men  of  the  country  do  no  work?  The  work  that 
they  do  is  both  difficult  and  important,  requir- 
ing ceaseless  activity,  great  strength  of  body  and 
mind,  and,  with  some  minor  exceptions,  promot- 
ing the  material  welfare  of  society  in  a  very  high 
degree.  Under  competitive  conditions,  which 
Marx  assumes,  neither  the  laborers  nor  the  con- 
sumers are  exploited  by  them,  for  wages  rise  and 
prices  fall,  while  new  fields  of  labor  are  opened 
up,  new  and  varied  products  are  created,  and 
under  such  leadership  the  country  is  able  to  main- 
tain a  large  and  increasing  population. 

Every  community  can  point  to  a  few  men  of 
this  kind,  to  whom,  in  large  measure,  its  pros- 


MARXIAN  THEORY  OF  SURPLUS  VALUE    119 

perity  is  due.  When  one  contemplates  the  vast 
and  complicated  mechanism  of  modern  industry 
and  realizes  the  need  of  incessant  activity  and 
eternal  vigilance,  one  finds  it  hard  to  see  how  it 
could  be  operated  by  society  itself,  without  the 
aid  of  private  enterprise  and  the  motive  power 
of  private  profit. 

It  should  be  noted,  also,  that  according  to  the 
figures  of  Professor  King,  the  portion  of  the  na- 
tion's income  going  to  profits  declined  from  44 
per  cent  in  the  year  1850  to  27.5  per  cent  in  1910, 
and  there  is  reason  to  expect  a  still  further  de- 
cline, as  the  country  is  more  fully  developed,  the 
number  of  competent  business  men  increases, 
and  competition  becomes  more  keen. 

In  the  year  1850,  when  business  profits  ab- 
sorbed 44  per  cent  of  the  total  national  income 
of  $2,200,000,000,  well-meaning  reformers  might 
have  tried  to  limit  profits  by  taxation  or  by  con- 
trol of  prices,  but  the  effect  of  such  action  would 
probably  have  been  injurious  to  the  prosperity 
of  the  country,  by  cutting  the  mainspring  of  busi- 
ness activity.  Instead  of  doing  this,  the  business 
men  of  the  United  States  were  given  a  free  hand, 
with  the  result  that  this  country  was  rapidly  de- 
veloped, consumers  in  every  country  benefited 
from  the  abundance  of  American  raw  mate- 
rials, and  the  business  men  in  the  year  1910  re- 
ceived but  27.5  per  cent  of  a  national  income  of 


120     MAKXIAN  THEORY  OF  SURPLUS  VALUE 

$30,000,000,000.  While  a  policy  of  let-alone  has 
its  defects,  an  effort  to  reduce  profits  and  control 
prices  in  any  drastic  way  might  easily  produce 
effects  the  very  opposite  of  those  intended.  Cer- 
tainly, such  action  by  the  government  of  any 
great  exporting  country,  like  England,  would  in 
all  probability  have  the  most  disastrous  effects. 

Kent,  Interest  and  Profits. — So  it  must  be  ad- 
mitted that  active  capitalists,  as  a  class,  are  not 
parasites,  and  that  the  profits  of  business,  under 
competitive  conditions,  are  the  earnings  of  busi- 
ness men,  and  not  a  surplus  value  stolen  from 
the  proletariat.  But  what  must  one  think  of  the 
idle  capitalists:  landowners,  bondholders  and 
mortgagors,  who  do  no  work  at  all,  but  merely 
lend  their  property  to  active  capitalists,  who  use 
it  productively  and  return  to  the  owners  a  part 
of  the  product  in  the  form  of  rent  or  interest? 
Surely  here  is  a  class  of  exploiters  and  parasites, 
useless  and  even  injurious  to  society,  reaping 
where  they  have  not  sown  and  gathering  where 
they  have  not  strawed. 

Plausible  as  this  line  of  reasoning  is,  it  over- 
looks the  fact  that  the  taking  of  interest  is  in- 
separably connected  with  the  institution  of  pri- 
vate property.  The  use  of  property  for  a  given 
time  is  something  which  has  value  in  exchange. 
Active  capitalists  are  glad  to  get  it,  expecting  to 
use  it  so  as  to  earn  the  stipulated  interest  and  a 


MARXIAN  THEORY  OF  SURPLUS  VALUE     121 

* 

net  profit  besides.  Laborers  are  not  exploited, 
for  the  greater  the  accumulation  and  investment 
of  capital  the  lower  the  rate  of  interest,  the 
greater  the  product  and  the  higher  wages  will  be. 
Moreover,  the  payment  of  interest  encourages 
savings  and  investment,  the  benefits  of  which 
accrue  to  the  whole  community,  and  chiefly  to 
the  laborers  themselves. 

There  is,  in  fact,  no  reason  why  the  owners  of 
property  should  lend  it  without  interest  that  is 
not  at  the  same  time  a  reason  why  they  should 
give  it  all  away  without  equivalent  or  considera- 
tion. If  the  taking  of  interest  is  robbery,  the 
whole  institution  of  private  property  is  robbery, 
and  that  is  exactly  what  the  socialists  say. 
"Property  is  theft,"  says  Proudhon,  and  if  he 
is  right,  the  taking  of  interest  is  theft  also.  But 
if  he  is  mistaken,  and  private  property  is  socially 
beneficial,  then  he  who  lends  his  money  at  interest 
is  no  more  a  thief  than  he  who  receives  $100  for 
an  acre  of  land  or  $1  for  a  bushel  of  potatoes. 

Mr.  Edward  F.  Adams,  of  San  Francisco, 
puts  the  case  very  strongly  and  justly  thus: 
"The  accumulating  man  is  essential  to  social  sav- 
ing. Social  saving  is  essential  to  the  support  of 
an  increasing  population.  Therefore,  socialism 
by  eliminating  the  capitalist  would  make  life 
impossible  to  many  who  now  live."  * 

i  Edward  F.  Adams,  The  Inhumanity  of  Socialism,  1913. 


122     MARXIAN  THEORY  OF  SURPLUS  VALUE 

While  defending  private  property,  with  the 
consequent  taking  of  rent,  interest  and  profits, 
and  asserting  that  the  essential  feature  of  busi- 
ness activity  is  not  exploitation  but  fair  exchange 
of  material  things  and  personal  services,  it  would 
be  absurd  to  say  that  there  are  no  abuses  con- 
nected with  capitalism,  no  exploitation,  robbery, 
parasitism,  nor  any  oppression  of  man  by  man. 

Two  Sides  to  the  Picture. — Where  there  is  so 
much  smoke  there  must  surely  be  more  or  less 
fire.  Laborers  complain  of  low  wages,  long 
hours,  and  frequent  unemployment.  Farmers 
say  that  they  are  robbed  at  every  turn  by  rail- 
roads, bankers,  grain  dealers,  millers,  packers, 
and  commission  merchants.  The  so-called  mid- 
dle class  of  the  cities,  finding  it  increasingly 
difficult  to  make  ends  meet,  cry  out  against 
the  "profiteering"  of  landlords,  merchants  and 
"trustified"  manufacturers.  Manufacturers  and 
merchants  themselves  complain  of  excessive  rail- 
way rates,  cut-throat  competition  and  confisca- 
tory  taxation.  Investors  denounce  unscrupulous 
promoters,  who,  by  lying  devices,  sell  worthless 
"securities,"  or,  from  the  milk  of  promising 
enterprises,  skim  off  the  cream  of  the  profits  and 
add  much  water  besides. 

Professors  of  political  economy,  even,  usually 
content  to  take  the  world  as  it  is,  for  better  or 
worse,  are  obliged  to  admit  that  all  is  not  well 


MARXIAN  THEORY  or  SURPLUS  VALUE     123 

with  the  body  economic.  They  see  that  in  the 
midst  of  free  competition,  so-called,  are  many 
opportunities  for  the  robber  barons  of  industry 
to  levy  toll  upon  the  weak  and  blackmail  upon 
the  strong.  As  moderate  progressives  and  quali- 
fied supporters  of  capitalism  they  are  accused 
of  intellectual  parasitism,  and  it  is  hinted  that,  in 
some  quarters,  academic  freedom  is  not  without 
its  limitations. 

Journalists,  too,  and  the  press,  as  a  whole,  are 
accused  of  pandering  to  the  wealthy,  and  it  is 
often  said  that  editorial  opinion  is  the  handmaid 
of  capitalism,  and  that  the  streams  of  news  are 
either  suppressed  or  poisoned  at  the  source.  Leg- 
islators, also,  and  men  in  high  executive  positions, 
are  said  to  be  the  representatives  of  capitalism, 
and  even  the  highest  courts  in  the  land  are  ac- 
cused of  tampering  with  the  scales  of  justice. 
The  Church,  finally,  founded  by  Jesus  the  car- 
penter, is  included  in  the  general  indictment  as 
engaged  in  the  impossible  task  of  trying  to  serve 
God  and  Mammon. 

So  many  and  so  great  are  the  evils  connected 
with  or  attributed  to  capitalism,  that  if  one  looks 
only  at  the  shady  side  of  it,  as  socialists  commonly 
do,  one  finds  it  very  dark.  If,  on  the  other  hand, 
one  looks  at  the  silver  lining  of  capitalism,  one 
finds  that  it  is  bright  with  great  achievements  and 
with  promise  of  still  better  things. 


124    MARXIAN  THEORY  OF  SURPLUS  VALUE 

The  Benefits  of  Capitalism. — Capitalism  has 
been  the  chief  cause  of  the  vast  improvement 
in  social  conditions  that  has  made  the  19th 
century  notable  in  the  history  of  mankind.  It 
has  explored  and  settled  the  wilderness,  has  im- 
proved land,  and  developed  mines.  It  has  built 
roads,  bridges  and  canals.  It  has  unified  the 
world  by  steamships,  railroads  and  telegraph 
lines.  It  has  built  great  cities  where  millions  of 
people  are  fed,  clothed  and  sheltered  in  a  degree 
of  comfort  unknown  to  the  aristocrats  of  former 
times.  It  has  created  schools,  colleges,  libraries, 
hospitals,  parks,  playgrounds,  and  a  thousand 
agencies  for  the  betterment  of  social  conditions. 

Capitalism  has  increased  wages,  decreased 
hours  and  improved  conditions  of  labor  in  many 
ways.  It  has  greatly  reduced  the  death-rate, 
thus  increasing  the  average  duration  of  human 
life.  It  has  improved  morality,  abolished  famine 
and  pestilence,  and  mitigated  the  horrors  of  war. 
It  has  elevated  the  working  class  to  the  level  of 
the  middle  class  of  two  hundred  years  ago,  and 
the  middle  class  it  has  raised  to  the  level  of  the 
nobles  and  princes  of  those  days. 

The  countries  where  capitalism  has  most  pre- 
vailed are  the  countries  where  the  laboring  man 
receives  the  highest  wages  and  maintains  the 
highest  standard  of  living.  The  countries  where 
capitalism  has  done  least,  such  as  China,  India 


MARXIAN  THEORY  OF  SURPLUS  VALUE    125 

and  Russia,  are  the  countries  where  wages  are 
lowest,  where  the  laboring  man  is  ever  on  the 
verge  of  starvation,  and  where  he  is  most  exploit- 
ed by  the  merchant,  the  money  lender  and  the 
government  official. 

Capitalism,  with  all  its  faults,  has  done  great 
things  for  the  western  world,  and  will  do  still 
more,  unless  the  social  revolutionists,  running 
amuck,  succeed  in  breaking  up  the  system.  If 
they  do,  there  will  be  no  land  owners,  no  capi- 
talists, no  business  men,  neither  rent,  interest, 
profits,  nor  surplus  value  of  any  other  kind.  The 
old  economic  order,  the  product  of  centuries  of 
industrial  evolution,  will  be  gone,  and  the  prole- 
tariat will  set  itself  to  the  laborious,  slow  and 
painful  task  of  creating  a  new  social  order  out 
of  the  ruins  of  the  old.  While  this  work  of  recon- 
struction is  going  on,  doubtless  millions  of  people 
will  die  of  starvation,  but,  as  the  revolutionists 
would  say,  what  will  that  matter  in  a  thousand 
years? 

If,  on  the  other  hand,  the  working  class  listens 
to  counsels  of  moderation  and  prudence,  they 
will  refuse  to  destroy  what  they  may  not  be  able 
to  build  again.  They  will  watch  and  wait  for  the 
outcome  of  the  great  Russian  experiment,  and 
for  the  results  of  governmental  and  co-operative 
effort  in  their  own  countries.  If  governments 
and  co-operative  societies  show  themselves  able  to 


126    MARXIAN  THEORY  OF  SURPLUS  VALUE 

compete  with  private  enterprise  in  producing 
better  results  at  a  lower  cost,  then  these  associa- 
tions, controlled,  no  doubt,  by  the  working  class, 
will  possess  the  field,  by  virtue  of  superior  effi- 
ciency, and  the  socialist  ideal  will  be  realized  by 
a  process  of  slow  and  continuous  evolution. 

But  if  not,  capitalism  will  continue  to  exist, 
and  the  working  class  will  find  it  to  their  advan- 
tage to  preserve  and  foster  it,  while  at  the  same 
time  doing  their  utmost  to  remove  abuses  and  to 
secure  as  large  a  share  in  the  joint  product  as 
they  can  without  injury  to  the  industrial  system 
of  which  they  are  a  part.  The  working  class,  no 
longer  the  exploited,  will  protect  and  cherish 
capitalism  as  they  would  a  cow  for  its  milk,  or 
the  fabled  goose  for  its  golden  eggs. 


VII 

SOCIALIST  ECONOMICS  OF 
MACHINERY 

The  use  of  machinery  is  the  most  characteristic 
feature  of  modern  industry.  Countries  like 
China,  where  nearly  everything  is  done  by  hand, 
are  still,  in  so  far  as  industry  is  concerned,  in  the 
ancient  or  mediaeval  period  of  their  history.  In 
fact,  modern  industry  is  of  very  recent  origin, 
dating  from  the  Industrial  Revolution,  which 
began  in  England  toward  the  end  of  the  18th 
century,  and  presently  spread  to  other  western 
countries. 

The  change  was  brought  about  by  the  inven- 
tion of  such  machines  as  the  spinning- jenny,  the 
power  loom,  the  cotton  gin  and  the  steam  engine. 
Since  that  time  revolutionary  changes  have  been 
made  in  almost  every  field  of  industry  by  the  in- 
vention of  the  steamship,  the  locomotive  engine, 
the  steam  hammer,  the  steam  shovel,  the  tele- 
graph, the  telephone,  the  sewing  machine,  the 
mowing  machine,  the  printing  press,  the  type- 
writer, the  linotype,  the  calculating  machine,  the 
gas  engine,  the  automobile,  the  elevator,  the 
machine  drill,  the  steam  turbine,  the  bottle-blow- 

127 


128     SOCIALIST  ECONOMICS  OF  MACHINERY 

ing  machine,  and  a  host  of  other  labor-saving 
machines,  with  innumerable  methods,  processes, 
devices  and  systems  of  organization  closely  con- 
nected therewith.  Wherever  possible  and  profit- 
able, machines  are  used  instead  of  men,  and  it 
almost  looks  as  though  the  time  were  coming 
when  human  labor  would  be  no  longer  needed 
and  machine-owning  capitalists  would  possess 
the  earth. 

Marx's  Views  on  Machinery.— Orthodox  so- 
cialists profess  themselves  unable  to  see  any 
benefit  to  the  laboring  class  arising  from  the  use 
of  machinery,  so  long  as  it  remains  in  private 
hands.  Their  views  are  substantially  the  same  as 
those  of  Marx  as  expounded  in  the  first  volume 
of  "Capital,"  and  may  be  stated  as  follows: 1 

(1)  Machinery  increases  the  product  of  in- 
dustry, but  the  surplus  goes  to  the  employer  in 
the  form  of  larger  profits  and  not  to  the  laborer 
as  higher  wages.  Wages  are  determined  by  the 
cost  of  subsistence  of  the  working  class  and  not 
by  the  productivity  of  their  labor;  therefore,  to 
increase  the  product  of  industry  is  to  increase 
exploitation  without  improving  the  condition  of 
the  working  class.  Marx  says:  "Like  every 
other  increase  in  the  productiveness  of  labor, 
machinery  is  intended  to  cheapen  commodities, 
and,  by  shortening  that  portion  of  the  working- 

i  Capital,  Part  IV. 


SOCIALIST  ECONOMICS  OF  MACHINERY    129 

day  in  which  the  laborer  works  for  himself,  to 
lengthen  the  other  portion  that  he  gives,  without 
an  equivalent,  to  the  capitalist.  In  short,  it 
is  a  means  for  producing  surplus  value."  * 

Again,  wages  are  paid  out  of  "variable 
capital,"  consisting  of  food,  clothing,  shelter, 
and  other  consumable  goods.  Now,  to  increase 
machinery  is  to  multiply  "constant  capital," 
which  cannot  be  used  in  payment  of  wages, 
while  variable  capital  relatively  declines.  If, 
then,  the  fund  out  of  which  wages  are  paid 
relatively  decreases,  while  the  working  popula- 
tion goes  on  increasing,  as  women  and  children 
are  thrown  on  the  labor  market,  it  is  clear  that 
wages  per  worker  must  fall,  and  only  the  toil 
of  several  members  of  his  family  can  save  the 
laborer  from  destruction. 

(2)  Machinery  constantly  displaces  labor, 
creating  a  vast  number  of  unemployed  workers, 
the  "industrial  reserve  army,"  whose  desperate 
struggle  for  work  depresses  the  wages  of  the 
employed,  thus  increasing  the  misery  and  deg- 
radation of  the  whole  working  class,  and  recruit- 
ing the  ranks  of  paupers  and  criminals.  With 
regard  to  the  introduction  of  the  power  loom, 
Marx  says:  "History  discloses  no  tragedy  more 
horrible  than  the  gradual  extinction  of  the  hand- 
loom  weavers."  2 

i  Capital,  p.  365.  2  Hid.,  p.  431. 


130     SOCIALIST  ECONOMICS  OF  MACHINERY 

He  thinks,  too,  that  capitalists  wish  to  perpet- 
uate this  fearful  condition  of  affairs  in  order 
that  they  may  have  abundance  of  cheap  labor. 
He  says  again:  "The  whole  form  of  the  move- 
ment of  modern  industry  depends  upon  the 
constant  transformation  of  a  part  of  the  labor- 
ing population  into  unemployed,  or  half-em- 
ployed hands." 

(3)  "Machinery,"  says  Marx,  "is  the  surest 
means  of  lengthening  the  working  day,"  since  it 
is  unproductive  while  idle,   and  the  capitalist 
naturally  desires  to  keep  such  expensive  equip- 
ment working  all  the  time.    Machinery  also  in- 
creases  the   intensity   of  labor,   thus   reducing 
necessary  labor-time,  or  the  time  needed  to  pro- 
duce the  laborer's  means  of  subsistence,  and  in- 
creasing surplus  labor-time  and  the  product  of 
it,  which  is  surplus  value. 

(4)  Machinery  is  the  chief  cause  of  the  ex- 
treme specialization  of  labor,  which  makes  a  man 
the  slave  of  a  machine,  increases  the  monotony 
of  labor,  and  has  a  narrowing  influence  on  the 
laborer,  both  physically  and  mentally. 

(5)  Machinery,  by  reducing  the  importance 
of  muscular  power,  makes  possible  the  employ- 
ment of  women  and  children,  thus  displacing 
men  and  reducing  the  wages  of  the  family  as  a 
whole  to  the  level  of  the  former  wages  of  the 
man  alone.     At  the  same   time  three   or  four 


SOCIALIST  ECONOMICS  OF  MACHINERY     131 

workers  are  exploited  instead  of  one,  so  that 
surplus  value  is  greatly  increased. 

(6)  Machinery  increases  the  number  of  "un- 
productive" laborers,  such  as  domestic  servants, 
clergymen,  physicians,  teachers,  actors  and  musi- 
cians, the  "modern  domestic  slaves,"  who  render 
personal  services  to  the  rich,  but  do  little  or  noth- 
ing for  the  public  good. 

(7)  Machinery  creates  a  mass  of  products  for 
which  there  is  no  demand,  because  the  working 
class,  with  their  decreased  wages,  are  unable  to 
buy  them,   and  this  is  the  chief  cause   of  the 
periodical    crises    so    characteristic    of    modern 
capitalism. 

(8)  These  evils  belong  not  to  the  use  of  ma- 
chinery as  such,  but  to  the  private  ownership  of 
it,  and  will  disappear  when  machinery  and  all 
other  capital  are  owned  and  operated  by  the 
working  class. 

A  Plausible  Case. — Such  are  some  of  the  ar- 
guments used  by  socialists  against  the  "capital- 
istic employment  of  machinery."  In  every  case 
there  is  a  certain  amount  of  truth  in  their  con- 
tention, enough  to  give  the  entire  argument  an 
appearance  of  truth  without  the  substance  of  it. 
In  fact,  Marx's  treatment  of  this  important  sub- 
ject is  full  of  contradictions,  his  interpretation  of 
the  facts  being  colored  and  perverted  by  his  pre- 


132     SOCIALIST  ECONOMICS  OF  MACHINERY 

conceived  theories  of  value,  surplus  value  and 
increasing  misery. 

No  doubt,  the  use  of  labor-saving  machinery 
has  enriched  many  enterprising  capitalists,  espe- 
cially those  who  have  first  introduced  the  various 
improvements.  While  doing  this,  however,  it 
has  brought  great  and  permanent  benefits  to  the 
laboring  class,  enabling  them  to  maintain  a  stand- 
ard of  comfort  possible  only  to  those  who  live 
in  highly  capitalized  countries.  A  brief  exami- 
nation of  the  socialists'  arguments  will  show  the 
essential  weakness  of  their  position. 

Contradictions.  —  When  socialists  admit, 
though  grudgingly,  that  machinery  increases  the 
product  of  industry,  they  admit,  in  effect,  that 
the  employers  cannot  keep  all  of  the  values  there- 
by created.  The  product  per  laborer  being  in- 
creased, the  market  value  of  labor  tends  to  rise, 
inasmuch  as  demand  for  labor,  which  proceeds 
from  the  supply  of  the  product,  has  increased 
more  rapidly  than  the  supply  of  labor. 

Except  where  machinery  is  temporarily  mo- 
nopolized, as  by  patents  or  trade  secrets,  competi- 
tion between  employers  causes  prices  to  fall  and 
wages  to  rise,  so  that  much  of  the  increased  prod- 
uct goes  to  the  laborers  in  the  form  of  increased 
money  wages  and  reduced  cost  of  living.  To  say 
that  the  income  of  the  laborer's  family  must  re- 
main the  same  and  even  diminish,  regardless  of 


SOCIALIST  ECONOMICS  OF  MACHINERY     133 

the  volume  of  the  product,  the  labor  of  wife  and 
children,  or  the  increased  efficiency  of  labor,  is 
to  appeal  to  the  subsistence  theory  of  wages  and 
the  "law"  of  increasing  misery,  back  of  which 
is  the  Malthusian  theory  of  population,  which 
Marx  ridicules. 

The  distinction  made  by  Marx  between  con- 
stant and  variable  capital  is  very  important,  but 
leads  to  conclusions  quite  contrary  to  those 
drawn  by  him.  Buildings,  ships,  railways,  ma- 
chinery, and  other  constant  capital,  cannot  in- 
crease without  a  corresponding  increase  in  wheat, 
flour,  bread,  cattle,  beef,  fish,  building  materials, 
houses,  cotton,  woolen  and  leather  goods,  and  all 
the  forms  of  variable  capital  available  as  food, 
clothing  and  shelter  for  the  working  class.  Con- 
stant capital  exists  for  the  sake  of  producing 
variable  capital;  it  is  a  means  to  that  end. 

Moreover,  it  is  in  the  production  of  cheap 
cottons,  woolens,  shoes,  and  other  staple  articles, 
such  as  the  poor  consume,  that  machinery  is  most 
used,  and  not  in  producing  luxuries  for  the  rich, 
which  are  more  commonly  made  by  hand.  If, 
then,  variable  capital  increases  more  rapidly  than 
the  number  of  laborers,  it  follows  that  the  value 
of  labor  must  rise,  while  the  value  of  commodi- 
ties relatively  falls.  In  other  words,  a  given 
quantity  of  labor  must  exchange  for  a  larger 
quantity  of  commodities  than  it  did  before. 


134     SOCIALIST  ECONOMICS  OF  MACHINERY 

Marx  practically  admits  this  when  he  says: 
"In  proportion  as  capitalistic  production  is  de- 
veloped in  a  country,  in  the  same  proportion 
does  the  natural  intensity  and  productivity  of 
labor  there  rise  about  the  international  level; 
therefore,  nominal  wages  will  be  higher,  but  not 
necessarily  real  wages."  * 

Now  it  is  clear  that  real  wages  also  will  be 
higher,  since  the  price  of  machine-made  com- 
modities will  fall.  In  fact,  barring  abnormal 
price  movements,  such  as  those  caused  by  the 
World  War,  real  wages,  or  the  purchasing  power 
of  wages,  have  risen  in  England,  Germany,  the 
United  States,  and  all  machine-using  countries, 
while  stagnation  and  poverty  characterize  the 
more  backward  countries,  like  most  parts  of  Asia, 
where  nearly  everything  is  done  by  hand. 

This  is  so  well  understood  in  England  that  the 
socialist  writers  Sidney  and  Beatrice  Webb,  say 
in  their  "Industrial  Democracy:"  "It  is  not  the 
individual  capitalist,  but  the  trade  union  which 
most  strenuously  insists  on  having  the  very  latest 
improvements  in  machinery."  2 

Machinery  May  Displace  Labor. — Labor-sav- 
ing machinery  is  labor-displacing,  but  usually 
only  for  a  time.  As  a  rule,  when  improved 
machinery  is  introduced  in  a  given  industry, 

1  Capital   (Sonnenschein,  publisher),  p.  571. 

2  Industrial  Democracy,  p.  413. 


SOCIALIST  ECONOMICS  OF  MACHINERY     135 

such  an  expansion  of  the  business  results  that 
presently  more  workers  are  employed  than  ever 
before.  Thus,  in  the  year  1820  there  were  about 
111,000  operatives  employed  in  the  cotton-spin- 
ning mills  in  England,  and  in  the  year  1880 
about  240,000  were  thus  employed,  and  at  much 
higher  wages. 

In  1880  there  were  in  the  United  States 
3,800,000  persons  engaged  in  manufacturing  and 
mechanical  pursuits,  and  in  the  year  1910  there 
were  10,800,000  persons  employed  in  those  in- 
dustries. In  1880  there  were  72,700  printers, 
lithographers  and  pressmen  in  the  United  States, 
and  in  1910  they  numbered  over  206,000,  in  spite 
of  the  introduction  of  the  linotype  and  other 
labor-saving  machines. 

It  is  often  said  that  the  trusts,  by  their  labor- 
saving  organization,  have  displaced  thousands 
of  commercial  travelers,  but  the  United  States 
census  seems  to  show  that  there  were  58,000  com- 
mercial travelers  in  1890,  and  no  less  than  163,- 
000  in  the  year  1910,  being  an  increase  of  180 
per  cent,  while  the  population  of  the  country  has 
increased  by  only  65  per  cent. 

No  doubt  there  has  been  great  hardship  con- 
nected with  the  destruction  of  handicrafts  by 
machine  methods,  but  such  revolutionary  changes 
are  neither  so  frequent  nor  so  important  as  they 
were  at  the  beginning  of  the  19th  century. 


136     SOCIALIST  ECONOMICS  or  MACHINERY 

Even  then,  much  of  the  misery  that  the  hand 
workers  of  England  suffered  might  have  been 
prevented  had  they  known  how  to  adapt  them- 
selves to  the  new  conditions,  as  organized  workers 
are  usually  able  to  do.  While  in  certain  districts 
hand-loom  weavers  were  starving,  in  other  places 
there  was  a  growing  demand  for  workers  in  the 
new  cotton  and  woolen  factories,  particularly  in 
the  north  and  west  of  England.  The  Webbs  go 
so  far  as  to  say:  "The  really  cruel  stages  of  all 

this  suffering  are  needless We  have 

failed  to  discover  a  single  instance  of  superses- 
sion by  machinery  in  which  it  would  not  have 
been  possible  for  the  superseded  handicraft  at 
least  to  have  died  a  painless  death.  There  are 
industries  which  have  been  changed  by  machinery 
as  thoroughly  as  weaving,  but  in  which,  owing 
to  the  enforcement  of  a  different  policy  by  the 
trade  unions  concerned,  the  hand-workers  have 
not  only  survived,  but  are  to-day  busier,  more 
highly  paid,  and  more  skillful  than  ever  they 
were  before."  * 

Nor  can  it  be  shown  that  employment  is  more 
irregular  than  formerly.  During  the  Middle 
Ages  all  classes  of  society  were  dependent  upon 
the  crops,  which  depended  upon  the  weather, 
than  which  nothing  could  be  more  variable  and 
irregular.  Famines  were  common,  so  that  not 

i  Industrial  Democracy,  p.  417. 


SOCIALIST  ECONOMICS  OF  MACHINERY     137 

only  was  there  frequent  stagnation  of  business 
and  scarcity  of  employment,  but  myriads  of 
people  died  of  starvation  and  pestilence. 

In  these  days  of  improved  transportation, 
when  the  world  produces  for  a  world  market, 
famines  are  almost  unknown,  except  in  non-capi- 
talistic countries,  and  most  of  the  workers  in  the 
industrial  army  are  employed  most  of  the  time, 
while  practically  all  of  the  unemployed,  the  un- 
employable excepted,  are  unemployed  only  a 
small  part  of  the  time. 

The  best  figures  on  this  subject  are  those  of 
the  British  trade  unions,  which  show  that  the 
mean  annual  percentages  of  unemployed  union- 
ists in  four  principal  industrial  groups  varied 
from  1.15  per  cent  in  1873  to  10.70  per  cent  in 
1879,  the  most  common  percentages  being  in 
the  neighborhood  of  4s  or  5  per  cent.  In  the 
early  years  of  the  20th  century,  the  percentages 
varied  from  a  minimum  of  2.85  in  1900  to  6.80 
in  1904  and  4.30  in  1907.1 

Statistics  of  unemployment  in  the  United 
States  are  incomplete  and  unsatisfactory,  but 
such  as  there  are  seem  to  show  that  fluctuations 
in  employment  in  the  State  of  New  York  and  in 
Massachusetts  are  much  greater  than  in  Great 
Britain,  perhaps  because  of  extreme  climatic  and 

i  W.  H.  Beveridge,  Unemployment,  p.  39.     A.  C.  Pigon,  Unem- 
ployment, p.  28. 


138     SOCIALIST  ECONOMICS  OF  MACHINERY 

seasonal  changes,  and  the  congestion  of  popula- 
tion, especially  recent  immigrants,  in  the  eastern 
cities.  The  Massachusetts  statistics  as  to  em- 
ployment of  organized  workers  show  that  from 
1909  to  1918  unemployment  varied  from  3  per 
cent  for  the  quarter  ending  June  29,  1918,  to 
18.3  per  cent  for  the  quarter  ending  December 
31,  1914.1 

Certainly,  unemployment  is  all  too  prevalent 
in  this  country,  especially  in  the  winter  months, 
but  it  cannot  be  attributed  to  the  use  of  ma- 
chinery nor  to  conspiracy  on  the  part  of  employ- 
ers. As  Marx  himself  says,  capitalists  desire  to 
have  their  capital  constantly  employed.  Capital 
seeks  labor  just  as  labor  seeks  capital,  and  the 
fact  that  they  do  not  always  meet  must  be  due 
to  imperfect  organization  of  industry  and  im- 
perfect foresight  of  future  industrial  conditions. 

As  production  becomes  more  scientific  and 
organization  more  perfect,  there  will  doubtless 
be  less  idle  capital  and  fewer  idle  workers,  and 
improvements  in  machinery  and  methods  will  be 
introduced  without  the  loss  and  distress  that  so 
often  accompany  them  at  the  present  time. 

Machinery  Makes  for  Shorter  Day. — What 
Marx  says  about  machinery  in  relation  to  the 
hours  of  labor  is  but  a  half-truth,  neglecting  the 

i  F.  T.  Carlton,  The  History  and  Problems  of  Organized  Labor, 
pp.  507-510. 


SOCIALIST  ECONOMICS  OF  MACHINERY     139 

influence  of  trade  unions  and  other  forces  mak- 
ing for  a  shorter  working  day.  In  fact,  ma- 
chinery has  made  possible  the  shorter  day,  and 
in  many  lines  of  business  both  employers  and 
employees  work  together  to  that  end.  It  is  fre- 
quently unprofitable  to  run  machinery  day  and 
night,  but  in  any  case  it  is  usually  better  to  work 
shifts  than  to  prolong  hours. 

A  man,  week  in  and  week  out,  can  do  more  in 
ten  hours  than  in  twelve  or  fifteen,  and  in  many 
industries  he  can  do  as  much  in  eight  hours  as  in 
ten.  An  English  manufacturer,  Lord  Lever- 
hulme,  has  introduced  a  six-hour  day  in  his  soap 
factories  at  Port  Sunlight,  and  believes  that 
many  other  manufacturers  will  find  his  system  of 
two  six-hour  shifts  preferable  to  a  single  shift  of 
eight  hours. 

Machinery  Not  a  Blight. — The  narrowing  in- 
fluence of  machinery  upon  the  worker  has  been 
greatly  exaggerated.  A  higher  degree  of  intel- 
ligence is  required  to  operate  complicated  ma- 
chinery than  to  work  with  simple  tools.  The 
locomotive  engineer  is  a  man  of  broader  gauge 
than  a  cab-driver,  and  a  farmer  who  runs  a  mow- 
ing machine  requires  more  intelligence  than  his 
predecessor  who  used  to  cut  hay  with  a  scythe. 

The  specialist  may  have  a  small  task  to  per- 
form, but  he  may  be  a  good  workman  in  several 
other  lines,  and  often  has  a  general  mechanical 


140     SOCIALIST  ECONOMICS  OF  MACHINERY 

training  as  well.  Besides,  the  life  of  a  worker  in 
a  great  factory  is  in  many  respects  broader  than 
that  of  the  handicraftsman  in  his  little  shop.  The 
modern  workman,  too,  often  enjoying  consider- 
able leisure,  has  the  broadening  influence  of  the 
public  school,  the  library,  the  trade  union,  the 
lodge,  the  institutional  church,  and  the  athletic 
club,  so  that,  both  mentally  and  physically,  he  is, 
or  may  be,  the  superior  of  the  artisan  of  former 
times. 

Men  Not  Displaced  by  Women. — Women  and 
children,  while  they  may  displace  men  in  certain 
fields  of  work,  can  never  displace  them  from  the 
industrial  army  so  long  as  most  occupations  de- 
mand strength,  endurance,  and  other  qualities 
which  men  possess  in  a  pre-eminent  degree. 

Machinery  has  increased  the  demand  for  men, 
while  at  the  same  time  making  places  for  women, 
with  the  result  that  the  total  product  of  industry 
has  been  greatly  increased.  Wages  are  paid 
out  of  the  product  of  industry,  and  women 
workers,  creating  at  least  as  much  as  they  receive, 
have  not  diminished  the  share  receivable  by  men. 

In  the  year  1890  the  number  of  women  and 
girls  engaged  in  gainful  occupations  in  the 
United  States  was,  in  round  numbers,  4,000,000, 
and  in  the  year  1910  they  numbered  8,000,000. 
If  these  women  could  not  earn  their  own  living, 
in  whole  or  in  part,  they  would  be  a  burden  upon 


SOCIALIST  ECONOMICS  OF  MACHINERY     141 

their  male  relatives,  and  the  nation's  income 
would  be  reduced  by  the  amount  of  the  commodi- 
ties produced  and  the  services  rendered  by  them. 
That  men  have  not  been  displaced  by  the  in- 
creased employment  of  women  is  shown  by  the 
fact  that  in  the  year  1910  there  were  30,000,000 
males  engaged  in  gainful  occupations,  as  against 
19,000,000  in  the  year  1890.  In  the  year  1910, 
therefore,  there  were  over  38,000,000  people  en- 
gaged in  gainful  occupations  out  of  a  total 
population  of  91,000,000,  or  an  average  of  about 
two  bread-winners  to  every  five  persons.  * 

The  theory  that  the  income  of  a  family  is  no 
greater  when  several  members  work  than  when 
the  burden  of  their  support  falls  on  the  man 
alone,  is  a  modification  of  the  Malthusian  theory 
of  population  and  quite  contrary  to  experience 
and  common  sense.  It  may  apply,  possibly,  to 
certain  restricted  localities,  or  to  certain  Asiatic 
countries,  where  every  betterment  of  the  laborer's 
lot  results  in  early  marriages  and  rapid  increase 
of  population,  but  it  has  not  been  true  of  the 
western  world  in  general  during  the  past  hun- 
dred years. 

Domestic  and  Professional  Workers. — Do- 
mestic servants  are  relatively  decreasing  in 
numbers,  while  their  wages  are  rapidly  increas- 

i  Thirteenth    Census    of    the    United    States    (1910),    Vol    IV. 
Occupation  Statistics. 


142     SOCIALIST  ECONOMICS  OF  MACHINERY 

ing,  as  every  employer  of  that  sort  of  labor 
knows  to  his  cost.  From  1890  to  1910  the  num- 
ber of  "servants  and  waiters"  increased  by  only 
27  per  cent,  while  the  working  population  in  the 
same  time  increased  by  60  per  cent.  In  fact,  the 
wages  of  domestic  servants  are  a  good  index  of 
the  increasing  prosperity  of  the  working  class, 
and  a  convincing  refutation  of  the  "law"  of  in- 
creasing misery. 

Clergymen,  physicians,  teachers,  artists  and 
other  persons  who  render  professional  and  per- 
sonal service  are  as  productive  as  any  labor- 
ers, even  though  they  may  not  directly  create 
material  wealth.  Also,  they  serve  the  working 
class  more  and  more,  for  the  increased  produc- 
tivity of  modern  industry  has  made  it  possible  for 
the  poorest  wage-earners  to  have  something  more 
than  the  bare  necessaries  of  life. 

The  socialist  theory  that  industrial  crises  are 
traceable  to  over  -  production  of  consumable 
goods  and  the  decreasing  purchasing  power  of 
the  working  class  has  been  often  refuted  and  will 
be  considered  in  detail  in  the  next  chapter. 

While  it  would  be  absurd  to  deny  that  there 
are  evils  connected  with  the  private  ownership 
and  use  of  machinery,  it  is  equally  absurd  to  say 
that  these  evils  must  grow  worse  and  worse,  until 
they  destroy  the  capitalism  that  engendered 
them,  and  reveal  a  new  and  almost  perfect  social 


SOCIALIST  ECONOMICS  OF  MACHINERY     143 

order  emerging  from  the  outworn  shell  of  the  old. 
Socialists,  with  all  their  historical  sense,  habit- 
ually glorify  the  remote  past  and  the  distant 
future,  but  look  upon  the  present  with  an  evil 
eye.  If  they  could  see  the  world  as  it  is,  in  the 
right  perspective  and  with  its  lights  and  shadows, 
they  would  know  that  the  wage-earners  of  to- 
day, with  all  their  troubles,  are  more  prosperous, 
more  intelligent,  and  more  independent  than 
their  predecessors  of  any  former  time. 

He  who  thinks  of  the  future  in  sober  reason, 
undazzled  by  impracticable  ideals,  must  see  that 
the  progress  of  the  working  class  is  likely  to  be 
made,  not  by  following  by-paths  and  vain  lures, 
but  by  keeping  pretty  well  to  the  beaten  track, 
and  giving  due  heed  to  the  old  landmarks  which 
the  fathers  have  set. 

Perhaps  the  path  will  broaden  out  and  become 
less  arduous  as  time  goes  on,  although,  if  all  dif- 
ficulties were  to  disappear,  we  might  justly  sus- 
pect that  we  were  going  down  the  broad  and  easy 
road  that  leads  to  destruction.  In  any  case,  it 
is  well  to  keep  our  eyes  open,  that  we  may,  if 
possible,  see  the  direction  in  which  we  are  mov- 
ing, for,  as  Bishop  Butler  finely  says:  "Things 
and  actions  are  what  they  are,  and  the  conse- 
quences of  them  will  be  what  they  will  be ;  why, 
then,  should  we  desire  to  be  deceived?" 

1  Sermons  at  the  'Rolls. 


ym 

THE    SOCIALIST   THEORY   OF 
CRISES 

Socialists  have  little  to  say  about  the  financial 
features  of  crises,  which  loom  so  large  at  the 
present  day,  but  they  have  a  clear-cut  and  very 
simple  theory  of  industrial  crises,  derived  from 
the  predecessors  of  Marx:  Fourier,  Sismondi  and 
Rodbertus.  According  to  this  explanation,  crises 
are  due  to  the  enormous  productiveness  of  mod- 
ern machine  industry,  coupled  with  the  increas- 
ing misery  of  the  working  class.  Rodbertus 
says:  "With  increasing  productiveness  of  the 
labor  of  society,  the  wages  of  the  laboring  class 
become  an  ever  smaller  portion  of  the  national 
product.  .  .  .  The  productiveness  of  labor  has 
increased  and  continues  to  increase,  while  the 
quantitative  sum  of  wages  has  at  best  not  in- 
creased in  like  proportion,  has  perhaps  remained 
stationary  or  even  fallen."  * 

It  is  a  question  of  supply  and  demand,  the 

i  K.  J.  Rodbertus,  Overproduction  and  Crises,  1850.    Translated 
by  Julia  Franklin,  1898,  pp.  71,  73. 

144 


SOCIALIST  THEORY  OF  CRISES        145 

supply  increasing  with  every  improvement  in 
machinery  and  methods,  the  demand  falling  off 
because  the  mass  of  the  people  cannot  buy,  their 
wages  being  kept  down  to  the  level  of  bare  sub- 
sistence. Presently  there  is  a  glut  or  surplus 
culminating  about  once  in  ten  years  in  a  crisis 
or  panic,  followed  by  a  period  of  depression,  then 
by  a  time  of  prosperity  leading  up  to  another 
crisis  more  disastrous  than  the  former,  and  thus 
decade  after  decade  capitalism  suffers  from 
periodic  attacks  of  an  incurable  disease. 

Rodbertus  held  that  crises  could  be  abolished 
by  giving  to  the  working  class  the  full  product 
of  their  labor,  so  that  consumption  might  keep 
pace  with  production,  demand  with  supply.  He 
said  that  unless  society  should  wake  up  to  the 
necessity  of  securing  this  ideal  distribution  of 
income,  "history  will  indeed  have  to  swing  the 
lash  of  revolution  over  her  again."  1 

Marxian  View  of  Crises. — Marxian  socialists 
think  that  capitalism  cannot  cure  its  own  dis- 
eases, and  that  crises  will  increase  in  frequency 
and  violence  until  the  final  collapse  of  the  decay- 
ing system  in  which  they  rage  like  an  intermittent 
fever.  Engels  says:  "The  mode  of  production 
rises  in  rebellion  against  the  form  of  exchange. 
The  bourgeoisie  are  convicted  of  incapacity 
further  to  manage  their  own  productive  forces. 

i  Rodbertus,  op.  cit.,  p.  140. 


146  SOCIALIST  THEORY  OF  CRISES 

The  proletariat  seizes  political  power  and  turns 
the  means  of  production  into  state  property."  1 

Engels  did  not  altogether  follow  the  theory  of 
Rodbertus,  and  even  attacked  it,  laying  more 
stress  upon  "anarchy  of  production"  as  the  chief 
feature  of  competitive  capitalism.  This  anarchy, 
however,  results  in  planless,  excessive  produc- 
tion, so  that  he  comes  back  to  overproduction  and 
underconsumption  as  the  basic  causes  of  indus- 
trial crises.  He  says :  "The  enormous  expansive 
force  of  modern  industry,  compared  with  which 
that  of  gases  is  mere  child's  play,  appears  to  us 
now  as  a  necessity  for  expansion,  both  qualitative 
and  quantitative,  that  laughs  at  all  resistance. 
.  .  .  The  extension  of  the  markets  cannot  keep 
pace  with  extension  of  production,  the  collisions 
become  periodic"  2 

The  position  of  Marx  in  this  regard  is  some- 
what doubtful  and  even  contradictory.  In  the 
second  volume  of  "Capital"  he  ridicules  the 
theory  of  Rodbertus  thus:  "It  is  mere  tautology 
to  say  that  crises  are  due  to  lack  of  consumers 
who  are  able  to  pay  for  what  they  want.  .  .  . 
Crises  in  each  instance  are  engendered  in  times 
in  which  wages,  as  a  rule,  are  rising  and  the  work- 
ing class  is  actually  retaining  a  larger  share  of 

1  F.   Engela,   Socialism,   Utopian  and  Scientific    ( Sonnenschein, 
publisher ) . 

2  Ibid.,  p.  41. 


SOCIALIST  THEORY  OF  CRISES        147 

the  part  of  the  yearly  products  which  is  destined 
for  general  consumption." 

But  in  the  third  volume  he  says:  "The  ulti- 
mate cause  of  all  real  crises  always  remains  the 
poverty  and  restricted  consumption  of  the  mas- 
ses as  compared  with  the  tendency  of  capitalist 
production  to  develop  the  productive  forces  in 
such  a  way  that  only  the  absolute  power  of  con- 
sumption of  the  entire  society  would  be  their 
limit."  2 

Notwithstanding  such  contradictions,  which 
are  as  common  in  the  works  of  Marx  as  he  im- 
agines them  to  be  in  capitalism  itself,  the  theory 
of  Rodbertus,  with  minor  modifications,  has  re- 
mained the  orthodox  Marxian  view  until  the 
present  day.  Thus,  L.  B.  Boudin,  in  "The 
Theoretical  System  of  Karl  Marx"  (1907)  says: 
"Anarchy  in  production  is  not  the  chief  cause  of 
crises  according  to  Marx.  .  .  .  This  cause  is 
the  inherent  contradiction  of  the  capitalist  sys- 
tem, the  dual  position  of  the  laborer  as  a  seller  of 
his  labor-power  and  a  purchaser  of  the  products 
of  his  labor-power,  and  the  creation  of  a  surplus 
product  flowing  therefrom  which  must  result  in 
an  over-production  of  commodities  quite  apart 
from  the  anarchy  of  production." 

i  Cited  by  Simkhovitch,  Marxism  versus  Socialism,  p.  230. 

2/6irf.,  p.  231. 

s  L.  B.  Boudin,  op.  cit.,  p.  238. 


148  SOCIALIST  THEORY  or  CRISES 

Foreign  Commerce. — In  recent  years  socialists 
have  called  attention  to  foreign  commerce  as 
making  an  outlet  for  the  surplus  products  of 
capitalistic  countries.  In  this  way,  they  say,  the 
downfall  of  capitalism  will  be  postponed  until 
the  markets  of  Russia,  China,  South  America, 
Africa,  and  other  backward  countries  are  as 
fully  exploited  as  those  of  western  Europe  and 
the  United  States. 

Then  there  will  be  for  capitalism  no  more 
worlds  to  conquer,  no  other  outlet  for  surplus 
products,  which  will  quickly  accumulate  until 
there  shall  be  in  every  line  an  enormous  over- 
production, when  the  most  fearful  crisis  in  his- 
tory will  occur,  involving  the  final  and  utter 
collapse  of  capitalism.  Then  the  proletarians 
of  the  world  will  take  control  and  reconstruct 
society  on  the  new  foundation  of  international 
collectivism. 

Victor  Berger,  in  his  testimony  before  the 
Committee  on  Elections  of  the  House  of  Repre- 
sentatives on  July  24,  1919;  made  much  of  this 
struggle  for  world  markets,  declaring  it  to  be 
the  chief  cause  of  the  World  War.  He  said: 
"Every  manufacturing  country  was  and  is  in 
the  same  boat  as  we  are — looking  for  markets 
to  sell  their  surplus  products.  Not  in  any  coun- 
try and  under  no  circumstances  can  the  pro- 
ducers get  money  enough  to  buy  back  the  prod- 


SOCIALIST  THEORY  OF  CRISES        149 

ucts  of  the  country  under  the  capitalist  system. 
No  matter  what  we  do  we  cannot  get  rid  of  all 
our  surplus  production — we  can't  sell  it ;  there  is 
not  market  enough  for  it  in  the  world." 

The  inference  is  clear.  Capitalism  in  every 
country,  trying  to  escape  from  itself,  carries  its 
contradictions  and  conflicts  to  every  part  of 
the  world,  only  to  find  itself  pursued  by  the  evil 
genius  of  the  system.  Sooner  or  later  the 
avenger  will  overtake  it,  and  the  old  order, 
economic  and  political,  capitalistic  and  imperial- 
istic, will  go  down  to  ruin. 

In  all  this  can  be  seen  the  strange  consistency 
and  inconsistency  of  "scientific"  socialism — con- 
sistent with  itself  as  a  great  product  of  the  im- 
agination, but  quite  inconsistent  with  the  facts 
which  it  is  supposed  to  explain. 

The  socialist  theory  of  crises  is  in  perfect 
harmony  with  the  rest  of  the  Marxian  system.  It 
goes  back  to  Hegel  in  that  it  is  an  expression  of 
revolutionary  dialectics,  which  finds  contradic- 
tions everywhere,  especially  in  capitalistic  so- 
ciety. Capitalism,  in  this  view,  is  torn  and 
shaken  by  contradictions  generated  by  the  con- 
ditions of  production  and  exchange.  We  have 
value  created  by  labor  and  surplus  value  seized* 
by  the  capitalist,  socialized  production  and  indi- 
vidualized distribution,  few  magnates  and  many 
proletarians,  concentration  of  wealth  and  increas- 


150  SOCIALIST  THEORY  OF  CRISES 

ing  misery,  increasing  production  and  decreasing 
consumption,  expansion  of  supply  and  contrac- 
tion of  demand — all  pointing  to  the  breakdown 
of  capitalism,  the  intensification  of  the  class 
struggle,  and  the  speedy  coming  of  the  social 
revolution. 

Here  are  suggested  two  ways  in  which  the  end 
of  the  capitalist  world  might  come:  first,  by  the 
expansive  and  explosive  power  of  modern  in- 
dustry; second,  by  the  action,  direct  or  indirect, 
of  the  working  class.  The  theory  of  crises,  of 
course,  lays  stress  upon  the  former,  but  by  no 
means  exclude  the  latter. 

Socialist  Theory  Is  False. — In  criticism  of 
this  theory  it  may  be  said  that  while  overproduc- 
tion of  consumption  goods  in  many  lines,  though 
not  in  all,  invariably  accompanies  an  industrial 
crisis,  the  cause  of  it  is  not  the  increasing  pov- 
erty of  the  working  class,  but  an  accumulation  of 
mistakes  in  production,  traceable  to  the  limita- 
tions of  human  ability  and  prescience  contending 
with  the  difficulties  and  complexities  and  inces- 
sant changes  of  the  business  world.  Marx  him- 
self admits  that  the  condition  of  the  working 
class  improves  during  the  time  of  prosperity 
which  precedes  and  gives  rise  to  the  crisis,  thus 
contradicting  the  central  point  of  the  socialist 
theory. 

As  Tugan-Baranowsky,  T.  E.  Burton,  Lang- 


SOCIALIST  THEORY  OF  CRISES        151 

worthy  Taylor,  M.  T.  England,  Wesley  Mit- 
chell, and  many  other  authorities  on  this  subject 
have  often  shown,  the  causes  of  the  crisis  are  to 
be  found  in  the  period  of  prosperity  which  leads 
up  to  it,  when  prices,  wages,  and  profits  are  all 
rising,  where  there  is  little  unemployment,  active 
demand,  and  no  glut  or  surplus  of  consumption 
goods.  Such  overproduction  as  there  is  consists 
rather  in  factories,  machinery,  railways,  ships, 
and  other  capital  goods,  which  have  not  yet 
yielded  satisfactory  returns  upon  the  investment 
because  they  have  not  created  as  large  a  sup- 
ply of  goods  and  services  as  was  expected,  or 
because  the  demand,  for  various  reasons,  lags 
behind. 

Besides,  there  is  the  financial  side  of  every 
crisis,  and  some  crises  are  more  financial  than  in- 
dustrial, so  that  the  system  of  credit  and  banking, 
practically  ignored  by  orthodox  socialists,  has 
far  more  to  do  with  crises  or  panics  than  the 
alleged  increasing  misery  of  the  working  class. 

Self -Contradiction. — Moreover,  it  can  easily 
be  shown  that  the  socialist  theory  of  crises  con- 
tradicts itself.  If  we  assume,  with  Rodbertus, 
that  the  product  of  industry  increases  faster  than 
the  sum  of  wages,  then  one  of  two  things  must 
happen:  the  goods  are  sold  or  they  are  not  sold. 
If  they  are  sold,  they  must  be  sold  at  a  price 
which  will  enable  the  workers  to  buy  them,  in 


152  SOCIALIST  THEORY  OF  CRISES 

which  case  prices  fall,  and  the  workers,  whatever 
their  money  wages,  enjoy  an  increase  in  real 
wages,  by  virtue  of  the  abundance  of  the  neces- 
saries and  comforts  of  life. 

If,  on  the  other  hand,  the  goods  are  not  sold, 
there  must  be  perpetual  over-production  and  a 
continual  crisis,  which  is  a  contradiction  in  terms. 
Perpetual  over-production  is  impossible  and  con- 
trary to  experience,  so  that  the  increasing  pro- 
ductiveness of  modern  industry  must  and  does 
cause  prices  to  fall  and  real  wages  to  rise,  while 
business  men  and  capitalists,  as  the  process  goes 
on,  must  content  themselves  with  smaller  profits 
and  lower  rates  of  interest. 

Again,  if  we  suppose,  for  sake  of  argument, 
that  the  working  class,  because  of  increasing 
misery,  cannot  buy,  is  it  not  absurd  to  suppose 
that  business  men  will  go  on  producing,  year 
after  year,  commodities  for  which  there  is  no 
demand?  Will  they  not  rather,  in  view  of  the 
stationary  or  declining  demand  for  the  neces- 
saries of  life,  the  things  consumed  by  the  work- 
ing class,  produce  luxuries  for  their  own  class, 
whose  purchasing  power  is  unlimited,  or  limited 
only  by  the  ever-increasing  mass  of  surplus 
value? 

This,  as  a  matter  of  fact,  is  what  business  men 
do.  They  produce  for  the  market,  in  response 
to  demand,  which  is  controlled  by  the  people  who 


SOCIALIST  THEORY  OF  CRISES        153 

have  purchasing  power.  If  the  wealthy  have  it, 
and  wish  to  spend  rather  than  to  invest,  many 
luxuries  are  produced ;  if  the  working-class  have 
it,  necessaries,  comforts,  and  some  luxuries  will 
be  produced  for  them.  Indeed,  as  has  been 
shown  in  the  preceding  chapter,  modern  machine 
methods  have  notably  increased  the  quantity  and 
reduced  the  price  of  the  leading  staples,  which 
are  chiefly  consumed  by  the  laborers  and  the 
middle  class. 

The  force  of  this  criticism  cannot  be  evaded  by 
saying  that  the  exporting  of  surplus  products  to 
foreign  lands  postpones  the  final  crisis  and  col- 
lapse of  capitalism.  The  embarrassing  surplus 
of  unsalable  goods  of  which  they  speak  does  not 
exist.  The  so-called  surplus  is  created  in  re- 
sponse to  foreign  demand.  If  there  were  no 
foreign  demand  the  surplus  would  not  be  creat- 
ed, except  by  accident  or  as  the  result  of  miscal- 
culation of  the  home  demand. 

If  the  United  States  were  shut  out  from  all 
the  markets  of  the  world,  she  would  lose  the 
profits  of  her  foreign  trade,  do  without  coffee, 
rubber,  tropical  fruits,  and  other  useful  com- 
modities, and  would  suffer  hardship  for  a  time, 
but  chronic  over-production  of  cotton,  wheat, 
cattle  and  the  like  would  not  be  the  permanent 
result.  Before  long  production  would  be  ad- 
justed to  demand,  the  elimination  of  foreign 


154?  SOCIALIST  THEORY  OF  CRISES 

commerce  might  tend  to  reduce  the  severity  of 
crises,  and  farmers,  manufacturers,  merchants 
and  laborers,  deprived  of  the  advantage  pre- 
viously enjoyed,  would  cut  their  coat  according 
to  their  cloth. 

The  United  States  could  get  along  fairly  well 
without  foreign  commerce;  but  England,  Bel- 
gium and  other  populous  manufacturing  coun- 
tries absolutely  need  the  foodstuffs  of  other 
countries  to  feed  their  people,  millions  of  whom 
would  die  if  isolated  from  the  rest  of  the  world. 
Therefore,  capitalism  is  not  the  chief  power  im- 
pelling nations  to  seek  foreign  markets,  to  ac- 
quire colonies,  and,  at  times,  to  make  war  for 
the  attainment  of  these  ends.  Manufacturers 
and  merchants  are  but  the  agents  of  the  people 
in  carrying  on  these  activities,  although,  of 
course,  they  are  fighting  for  their  own  hand.  A 
socialist  England,  under  the  same  pressure  of 
population,  might  be  even  more  militaristic  and 
navalistic  than  the  bourgeois  England  of  the 
present  day.  Indeed,  there  is  reason  to  think 
that  capitalism,  with  its  network  of  international 
connections,  is  more  pacifistic  than  any  socialist 
nation  would  be,  with  its  aggressive  propaganda 
for  the  conversion  of  the  world. 

Socialist  Prophecy  Groundless. — As  to  the 
prophecy  concerning  the  final  crisis  and  end  of 
the  capitalist  world,  it  may  justly  be  said  that 


SOCIALIST  THEORY  OF  CRISES        155 

no  part  of  socialist  doctrine  is  more  groundless 
than  this,  nor  any  article  of  their  creed  more 
plainly  due  to  what  philosophers  call  "the  will 
to  believe." 

Crises,  as  is  well  known,  are  characteristic  of 
periods  of  development  and  progress,  and  not 
of  times  of  conservatism  and  attainment.  While 
the  world  is  being  exploited  and  developed,  and 
the  nations  are  competing  with  one  another  for 
the  largest  possible  share  in  this  growing  and 
profitable  trade,  periods  of  rapid  development 
are  sure  to  be  followed  by  times  of  crisis  and  de- 
pression. But  when  these  pioneer  days  come  to 
an  end,  international  commerce  will  probably 
settle  down  to  comparatively  steady  and  regular 
business,  without  the  enthusiasms,  risks  and 
losses  of  those  adventurous  times. 

Orthodox  socialists  have  been  expecting  the 
end  of  the  capitalist  world  for  a  long  time,  and 
every  industrial  and  financial  crisis  makes  them 
think  that  the  day  of  wrath  is  at  hand.  Shortly 
after  the  world  crisis  of  the  early  'nineties,  the 
International  Socialist  Congress  of  1896  passed 
the  following  resolution:  "The  economic  and 
industrial  development  is  going  on  with  such 
rapidity  that  a  crisis  may  occur  within  a  com- 
paratively short  time.  The  Congress,  therefore, 
impresses  upon  the  proletariat  of  all  countries 
the  imperative  necessity  of  learning,  as  class-con- 


156  SOCIALIST  THEORY  OF  CRISES 

scious  citizens,  how  to  administer  the  business 
of  their  respective  countries  for  the  common 
good."  x 

But  after  that  time  there  was  no  world  crisis 
of  the  first  magnitude  until  the  year  1914,  when 
the  World  War  broke  out,  and  even  then  capi- 
talism did  not  collapse,  but  rose  to  the  occasion 
in  a  most  extraordinary  way,  carrying  the  na- 
tions along  through  more  than  four  years  of 
war  and  three  years  of  slow  and  painful  re- 
cuperation. 

The  Present  Crisis. — The  crisis  which  is  now 
on,  and  which  may  be  followed  by  years  of  de- 
pression, was  not  caused  by  the  increasing  misery 
of  the  working  class,  but  was  the  natural  result 
of  great  inflation,  waste,  piling  up  of  debts  and 
credits,  expansion  and  restriction  of  production 
in  many  lines,  and  general  dislocation  of  the 
financial  and  industrial  system.  Nor  is  it  likely 
to  result  in  the  breakdown  of  capitalism,  even 
though  it  may  be  accomplished  by  widespread 
bankruptcy,  serious  losses  to  business  men  and 
other  property  owners,  and  much  hardship 
among  the  working  class. 

In  spite  of  all  that,  the  industrial  structure, 
like  a  damaged  ant-hill  or  honeycomb,  will  be 
built  up  again,  much  as  before,  unless,  indeed, 
the  workers  rebel  against  their  leaders  and  try 

i  Bernstein,  Zur  Geschichte  u.  Theorie  d.  Socialismus,  p.  221i 


SOCIALIST  THEORY  OF  CRISES        157' 

to  set  up  a  totally  new  system  of  control.  This 
would  not  be  the  predicted  collapse  of  capitalism 
by  industrial  crisis,  according  to  the  formula  of 
Rodbertus,  but  the  final  outcome  of  the  class 
struggle,  the  revolt  of  the  proletariat,  upon 
which,  when  all  else  fails,  Marxian  socialists 
take  their  final  stand. 

The  fact  is  that  capitalism,  like  a  healthy  liv- 
ing organism,  has  wonderful  powers  of  adapta- 
tion to  changing  environment,  and  of  recuper- 
ation after  severe  strains  and  deathlike  wounds. 
Even  before  the  War,  the  United  States  was 
protecting  itself  against  financial  troubles  by 
improving  the  system  of  credit  and  banking, 
especially  through  the  Federal  Reserve  Act, 
which  took  effect  on  November  16,  1914.  When 
the  war  broke  out  the  monetary  stringency  was 
relieved  by  the  issue  of  emergency  notes  under 
the  Aldrich-Vreeland  Act,  which  tided  over  the 
idanger  until  the  Federal  Reserve  Board  had  the 
situation  well  in  hand.  The  Board  may  have 
made  mistakes,  but  it  has  doubtless  prevented  a 
serious  financial  crisis  on  more  than  one  occasion. 

Similarly,  the  European  countries  have  car- 
ried on  four  years  and  more  of  war  without 
financial  collapse,  by  means  of  the  moratorium, 
the  closing  of  stock  and  produce  exchanges,  ad- 
vances by  the  great  central  banks,  the  issue  of 
emergency  currency,  and  other  devices.  Even 


158  SOCIALIST  THEORY  or  CRISES 

if  great  financial  disaster  should  come,  the  Allied 
nations,  at  least,  will  not  consider  it  too  great  a 
price  to  pay  for  victory  and  peace. 

Protective  Tendencies.  —  Nor  would  it  be 
hard  to  show  that  capitalism  is  protecting  itself 
against  industrial  crises  also,  by  means  of  better 
methods  of  promotion  and  investment,  by  scien- 
tific production,  by  business  education,  by  the 
analysis  of  industrial  conditions  which  makes  a 
certain  degree  of  prediction  possible,  by  co-oper- 
ation among  business  men,  and  by  the  concen- 
tration of  ownership  and  control,  which,  if  not 
carried  too  far,  may  stabilize  and  regulate  the 
industrial  organization,  and  give  it  a  certain  im- 
munity from  the  worst  effects  of  industrial 
crises.  This  tendency  is  recognized  by  some 
socialists,  notably  Bernstein,  who  says:  "With- 
out allowing  myself  to  prophesy  concerning  the 
final  outcome  of  syndicates  and  trusts,  I  have 
recognized  the  possibility  of  lessened  danger 
from  crises  because  of  the  adaptation  of  produc- 
tion to  the  needs  of  the  market."  * 

Thus  is  brought  to  light  another  contradiction 
in  the  Marxian  system,  between  the  theory  of 
anarchic  or  planless  production,  resulting  in 
crises,  and  the  theory  of  the  concentration  of 
capital  resulting  in  increasing  exploitation  and 
the  rebellion  of  the  working  class.  Unable  to 

i  Bernstein,  Die  Voraussetzungen  d.  Socialismus   (1899),  p.  76. 


SOCIALIST  THEORY  OF  CRISES        159 

hold  both  of  these  inconsistent  doctrines,  most 
socialists  have  ceased  to  look  for  the  collapse  of 
capitalism  by  the  way  of  over-production,  and 
center  their  hopes  on  the  concentration  of  capi- 
tal, the  elimination  of  the  middle  class,  and  the 
peaceful  or  violent  uprising  of  the  proletariat. 
In  fact,  the  overproduction  and  underconsump- 
tion theory  is  so  illogical  and  unsound,  that  it 
would  have  been  repudiated  long  ago,  but  for  its 
tactical  value  in  socialist  propaganda. 


IX 


THE  MARXIAN  THEORY  OF  THE 

CONCENTRATION  OF 

CAPITAL 

Marxian  socialism  is  scientific  in  intent,  if  not 
in  content,  because  it  tries  to  formulate  the  laws 
of  social  evolution  and  professes  to  see  the  new 
social  order  growing,  as  an  embryo,  within  the 
body  of  the  old. 

The  concentration  of  capital  was  partly  ob- 
served by  Marx,  but  for  the  most  part  deduced 
from  the  theories  of  value  and  surplus  value  in 
terms  of  the  Hegelian  logic.  In  fact,  the  theory 
proceeds  so  logically,  step  by  step,  from  premise 
to  conclusion,  that  one  suspects,  at  the  very  out- 
set, that  it  has  but  slight  relation  to  the  facts  in 
the  case.  Certainly,  the  "law"  of  the  accumula- 
tion and  concentration  of  capital  was  not  proved 
statistically,  but  thought  out  by  Marx  as  a 
mathematician  derives  one  proposition  after  an- 
other from  preliminary  definitions,  axioms  and 
postulates. 

The  argument  runs  about  like  this:  All  value 
is  created  by  labor,  which  has  the  "peculiar" 

160 


THEORY  OF  CONCENTRATION  OF  CAPITAL     161 

power  of  creating  more  value  than  it  receives. 
This  surplus  value,  stolen  by  the  capitalists, 
grows  ever  larger  with  every  improvement  in 
machinery  and  methods  of  production,  while  the 
misery  of  the  working  class  increases  more  and 
more.  Wealth  accumulates,  because  neither  the 
laborers  nor  the  capitalists  can  consume  it,  and, 
as  competition  grows  fiercer,  the  big  capitalists, 
the  most  efficient,  eat  up  the  little  ones.  Thus 
the  middle  class  gradually  disappears,  and  the 
proletariat,  the  many,  seeing  great  wealth  in  few 
and  feeble  hands,  take  it  away  from  them,  as  the 
strong,  in  the  struggle  for  existence,  have  always 
done. 

Marx  'Anticipated.  —  Socialists  often  give 
Marx  credit  for  having  prophesied  the  concen- 
tration of  capital  as  realized  in  the  trusts  and 
combinations  of  the  present  day,  but  several 
other  writers  had  already  done  that.  The  bril- 
liant French  economist,  Constantin  Pecqueur, 
in  his  "Economic  Sociale"  (2d  ed.,  1839),  whose 
work  was  well  known  to  Marx,  anticipated  him 
in  a  remarkable  way,  thus:  "Everyone  knows 
that,  in  reality,  in  using  steam  to  reduce  the  cost 
of  products  and  realize  great  advantages,  it  is 
necessary  to  operate  on  a  large  scale,  to  use  large 
amounts  of  capital  and  a  large  number  of  work- 
men ;  in  a  word,  to  produce  on  a  large,  scale.  .  .  . 
One  may  readily  infer  that  joint  stock  com- 


162     THEORY  OF  CONCENTRATION  OF  CAPITAL 

panics  or  very  rich  individual  capitalists  and 
manufacturers  will  swallow  up  the  work  of  the 
small  producers,  killing  them  off  by  competition 
which  is  immeasurably  unequal  and  cruelly  piti- 
less. .  .  .  Either  on  the  disappearance  of  small- 
scale  production  the  small  producers  will  be 
co-partners  of  the  large  concerns;  or  they  will 
degenerate  into  paid  workmen,  into  a  herd  of 
serfs  working  from  day  to  day  in  factories ;  into 
proletarians,  always  poor,  always  without  a  fu- 
ture; and  all  the  large  industries  will  be  exclu- 
sively monopolized  by  an  industrial  feudalism."  l 
The  oft-quoted  statement  of  Marx  himself, 
though  strikingly  eloquent,  does  not  add  much 
to  this.  In  "Capital"  he  says:  "This  expro- 
priation is  accomplished  by  the  action  of  the 
immanent  laws  of  capitalistic  production  itself, 
by  the  centralization  of  capital.  One  capitalist 
always  kills  many.  .  .  .  Along  with  the  con- 
stantly diminishing  number  of  the  magnates  of 
capital  who  usurp  and  monopolize  all  advantages 
of  this  process  of  transformation,  grows  the  mass 
of  misery,  oppression,  slavery,  degradation,  ex- 
ploitation; but  with  this  too  grows  the  revolt  of 
the  working-class,  a  class  always  increasing  in 
numbers  and  disciplined,  united,  organized  by 
the  very  mechanism  of  the  process  of  capitalist 

i  Cited  in  Simkhovitch,  Marxism  versus  Socialism,  p.  48.     Cf. 
Marx,  Capital,  p.  787. 


THEORY  or  CONCENTRATION  OF  CAPITAL     163 

production  itself.  The  monopoly  of  capital  be- 
comes a  fetter  upon  the  mode  of  production, 
which  has  sprung  up  and  flourished  along  with, 
and  under  it.  Centralization  of  the  means  of 
production  and  socialization  of  labor  at  last 
reach  a  point  where  they  become  incompatible 
with  their  capitalist  integument.  This  integu- 
ment is  burst  asunder.  The  knell  of  capitalist 
private  capital  sounds.  The  expropriators  are 
expropriated." 

Agriculture. — The  concentration  of  capital, 
simple  as  the  concept  may  seem  to  be,  has  become 
quite  complex,  including  at  least  three  more  or 
less  distinct  ideas:  large-scale  production  in 
single  plants,  the  combination  of  a  number  of 
plants  into  a  trust  or  "combine,"  and  the  concen- 
tration of  wealth  in  the  hands  of  a  few  magnates 
of  capital.  Then,  too,  the  degree  of  concentra- 
tion varies  greatly  according  to  the  nature  of  the 
business,  whether  agriculture,  mining,  merchan- 
dising, manufacture  or  transportation. 

Marx  detested  peasants,  as  a  class,  regarding 
them  as  the  greatest  obstacles  in  the  way  of 
socialism.  But,  in  his  opinion,  they  were  a  van- 
ishing race,  destined  to  go  down  before  the  march 
of  capitalism.  Engels  expected  the  peasants  of 
western  Europe  to  be  ruined  by  Russian  and 
American  competition,  after  which  small  hold- 

i  Capital,  p.  788. 


164     THEORY  OF  CONCENTRATION  OF  CAPITAL 

ings  everywhere  would  be  swallowed  up  by  great 
estates  and  bonanza  farms. 

Perhaps,  if  Marx  and  Engels  had  had  more 
experience  of  country  life,  they  would  have 
understood  the  advantages  of  the  small  farm  and 
the  extreme  difficulty  of  applying  capitalistic 
methods  to  agriculture.  At  any  rate,  agricul- 
tural statistics  in  all  countries  are  quite  at  vari- 
ance with  the  socialist  prediction. 

For  example,  in  Germany,  in  the  year  1882, 
no  less  than  94.19  per  cent  of  the  farms  were  of 
less  than  20  hectares  (50  acres),  and  14,174,539 
hectares  out  of  a  total  of  31,868,972  hectares 
were  thus  held.  In  the  year  1895,  the  situation 
was  practically  the  same:  94.48  per  cent  of  the 
farms  were  under  20  hectares,  and  45.57  per  cent 
of  the  total  area  consisted  of  such  holdings.1 

The  American  farm  is,  of  course,  far  larger 
than  the  European,  but  it  shows  a  tendency  to 
diminish  in  size.  According  to  the  United  States 
Census,  the  average  size  of  farms  in  the  year 
1850  was  202.6  acres;  in  the  year  1900  it  was 
146.2  acres;  and  by  the  year  1910  it  had  fallen  to 
138.1  acres.2 

True,  the  value  of  the  average  farm,  including 
buildings,  machinery  and  livestock,  in  the  year 
1850  is  given  as  $2,700,  in  1900  it  was  $3,563, 

•Lgtatistik  des  Deutchen  Reiches.     N.  F.  Bd.  112,  p.  11.     Cf. 
Skelton,  Socialism,  p.  159. 

2  Thirteenth  Census  of  the  United  States.    Abstract. 


THEORY  OF  CONCENTRATION  OF  CAPITAL     165 

and  in  1910  it  was  $6,444.  This,  of  course,  in- 
dicates the  prosperity  of  the  American  farmer 
rather  than  his  approaching  annihilation 

A.  M.  Simons,  in  "The  American  Farmer" 
(1903)  and  later  writings,  has  tried  to  show  that 
the  increase  of  tenancy  and  farm  mortgages,  to- 
gether with  the  activities  of  banks,  railway  com- 
panies, elevator,  cold  storage  and  packing  com- 
panies, and  the  like,  have  made  the  farmers  more 
dependent  than  formerly  on  the  "big  business" 
of  New  York,  Chicago,  Minneapolis  and  other 
great  cities. 

Apart  from  the  fact  that  these  various  agen- 
cies have  been  of  immense  benefit  to  the  farmers, 
especially  in  the  West,  this  new  interpretation  of 
concentration  is  very  far-fetched  and  quite  for- 
eign to  the  thought  of  Marx.  Certainly,  this 
great  industry,  the  property  values  of  which,  in 
the  year  1910,  were  estimated  at  $46,000,000,000, 
or  about  a  fourth  of  the  total  wealth  of  the 
United  States,  must  be  excluded  from  the  "law" 
of  concentration  until  some  time  in  the  dim  and 
distant  future. 

Wholesale  and  Retail  Trade. — Then  there  is 
another  great  field  in  which  concentration, 
though  considerable,  has  fallen  far  short  of  the 
socialist  expectation,  and  that  is  wholesale  and 
retail  trade.  According  to  the  United  States 
Census  there  were  42,326  "wholesale  merchants 


166     THEORY  OF  CONCENTRATION  OF  CAPITAL 

and  dealers"  in  the  year  1900,  and  no  less  than 
64,166  people  of  this  class  in  the  year  1910.  The 
figures,  of  course,  say  nothing  about  the  volume 
of  business  done  by  these  people. 

Retail  merchants  have  not  multiplied  so 
rapidly  as  those  calling  themselves  wholesalers, 
but  it  is  generally  admitted,  even  by  socialists, 
that  small  merchants  are  holding  their  own  very 
well  against  the  great  department  stores,  the 
chain  stores  and  even  the  mail-order  houses.  The 
number  of  "retail  merchants  and  dealers"  in  the 
United  States  increased  from  790,886  in  the  year 
1900  to  939,987  in  1910.1 

The  Financial  Power. — As  to  railway  trans- 
portation, it  is  often  said  that  about  eight  groups 
of  owners  own  and  control  some  two-thirds  of 
the  mileage  of  the  United  States,  but  there  have 
been  few  mergers  in  recent  years,  for,  in  most 
cases,  the  expected  profits  of  centralization  have 
not  materialized.  Moreover,  the  railways  of  the 
United  States  after  all  their  consolidation,  do 
not  yet  seem  "ripe"  for  socialization. 

In  the  financial  field  the  existence  of  a  "money 
trust"  has  been  often  asserted  and  as  often  de- 
nied. The  report  of  the  Pujo  Committee  in 
1913  stated  that  20  of  the  largest  banks  in  New 
York  City  held  42.97  per  cent  of  the  total  re- 

i  Thirteenth  Census  of  the  United  States  (1910).  Occupation 
Statistics. 


THEORY  OF  CONCENTRATION  OF  CAPITAL     167 

sources  of  the  city  bank  and  trust  companies, 
while  the  banking  resources  of  the  city  amounted 
to  about  a  fifth  of  those  of  the  whole  country.  It 
also  stated  that  those  financial  interests,  through 
interlocking  directorates,  had  large  control  over 
the  policy  of  112  corporations  having  aggregate 
resources  or  capitalization  of  $22,245,000,000. 
The  committee,  however,  did  not  show  how  the 
New  York  financial  interests  used  their  power. 
They  said:  "Your  committee  has  no  evidence  that 
this  power  is  being  used  oppressively,  and  no 
means  of  ascertaining  the  facts,  so  long  as  their 
profits  are  undisclosed."1 

New  York  City  is,  of  course,  the  financial  cen- 
ter of  the  United  States,  and  it  is  not  surprising 
to  learn  that  twenty  of  its  chief  banks  own  a  tenth 
or  twelfth  of  the  banking  resources  of  the  coun- 
try. A  list  of  twenty  great  Canadian  banks, 
with  all  their  branches,  would  make  a  far  more 
formidable  showing,  yet  they  compete  very  ac- 
tively with  one  another. 

Nor  is  it  strange  that  many  of  the  great  cor- 
porations have  their  head  offices  in  New  York  or 
New  Jersey  and  that  prominent  financiers  should 
be  members  of  various  directorates.  It  is  a  long 
story,  with  much  to  be  said  on  both  sides,  but  it  is 
safe  to  say  that  both  the  degree  of  concentration 

i  Report  of  the  Committee  to  Investigate  the  Concentration  of 
Control  of  Money  and  Credit,  February  28,  1913,  p.  133. 


168     THEORY  OF  CONCENTRATION  OF  CAPITAL 

and  the  restriction  of  competition  in  the  financial 
world  are  far  less  than  is  commonly  supposed. 

Manufacturing. — But  it  was  in  manufactur- 
ing that  Marx  expected  concentration  to  have  its 
full  effect,  and  during  the  past  twenty  years 
socialists  have  pointed  to  the  great  American 
"trusts"  as  a  striking  fulfilment  of  his  prediction. 
Yet  even  here  the  movement  seems  to  slacken  and 
fall  short  of  the  mark. 

In  the  year  1904  there  were  216,180  manufac- 
turing establishments  in  the  United  States,  and 
in  the  year  1914  there  were  275,791  of  such  estab- 
lishments. Of  course,  not  all  of  them  were  in- 
dependent concerns,  as  several  "establishments" 
might  be  owned  by  a  single  corporation.  Cer- 
tainly, the  corporation  is  of  growing  impor- 
tance, for  in  the  year  1904  no  less  than  71.9  per 
cent  of  the  "value  added"  was  produced  by  cor- 
porations, and  in  the  year  1914  the  contribution 
of  corporations  amounted  to  81.9  per  cent  of 
such  value.  "Value  added,"  it  may  be  said,  in 
passing,  is  the  value  of  the  product  less  the  value 
of  the  materials  used.1 

Large  scale  production,  too,  is  going  on  apace. 
The  manufacturing  establishments  of  the  largest 
size,  having  a  yearly  product  valued  at  $1,000,- 
000  or  more,  in  the  year  1904  produced  29.9  per 
cent  of  the  value  added,  and  in  the  year  1914 

i  Thirteenth  Census  of  the  United  States  (1910).     Abstract. 


THEORY  OF  CONCENTRATION  OF  CAPITAL    169 

their  quota  was  41.4  per  cent.  The  figures,  of 
course,  do  not  show  whether  manufacturing  is 
being  "trustified"  or  not,  nor  the  extent  to  which 
combination  is  likely  to  prevail  in  the  future. 
There  is  reason  to  think,  however,  that  the  move- 
ment is  nearing  its  limits.  Jenks  and  Clark,  in 
"The  Trust  Problem"  (1917)  say:  "In  estimat- 
ing the  extent  of  both  the  economic  and  social 
effects  of  industrial  combinations  it  is  essential 
to  note  that  their  activity  is  limited  now  to  only  a 
part  of  the  industrial  field,  not  more  than  25  per 
cent,  at  the  most,  and  there  seems  no  likelihood 
that  they  will  in  this  era,  if  ever,  cover  it  en- 
tirely."1 

Even  the  most  notorious  trusts  seem  to  have 
trouble  in  dominating  their  respective  industries. 
In  the  year  1904,  the  Standard  Oil  Company 
produced  86.5  per  cent  of  the  illuminating  oil 
refined  in  the  United  States,  but  since  that  time, 
because  of  competition  in  California,  Texas  and 
Oklahoma,  the  proportion  of  the  dissolved  com- 
panies has  been  much  reduced.  During  the  early 
years  of  the  American  Sugar  Refining  Company 
it  refined  from  80  to  90  per  cent  of  the  national 
output,  but  its  proportion  was  not  over  60  per 
cent  in  the  year  1910,  and,  according  to  the  Sugar 
Trade  Journal,  it  was  only  33.64  per  cent  in  the 
year  1916. 

i  Jeaks  and  Clark,  op.  cit.,  p.  212. 


170     THEORY  OF  CONCENTRATION  or  CAPITAL 

The  International  Harvester  Company  pro- 
duced in  the  year  1902  about  90  per  cent  of  the 
binders,  80  per  cent  of  the  mowers  and  67  per 
cent  of  the  rakes  manufactured  in  the  United 
States,  whereas  in  the  year  1918  the  quotas  were 
reduced  to  65  per  cent,  60  per  cent,  and  58  per 
cent,  respectively. 

The  United  States  Steel  Corporation,  organ- 
ized February  23,  1901,  produced  in  that  year 
4*3.2  per  cent  of  the  pig  iron,  66  per  cent  of  the 
steel  ingots,  60.7  per  cent  of  the  steel  rails  and 
50.1  per  cent  of  finished  rolled  product,  includ- 
ing structural  materials;  but  in  the  year  1911  the 
Steel  Corporation  manufactured  45.2  per  cent 
of  pig  iron,  54  per  cent  of  ingots,  57.1  per  cent 
of  rails,  and  45.7  per  cent  of  the  rolled  product. 
These  products,  of  course,  are  the  raw  materials 
for  the  manufacture  of  more  highly  finished 
products,  in  which  combination  has  not  gone  so 
far.1 

Diffusion  of  Ownership. — Even  if  all  the  man- 
ufacturing industries  of  a  given  country  were 
completely  trustified  and  monopolized,  and  they 
are  very  far  from  that,  they  would  not  fulfill  the 
Marxian  test  of  "ripeness"  for  socialization  un- 
less the  ownership  of  them  were  also  concentrated 
in  a  few  hands.  But,  on  the  contrary,  there  is  a 
strong  tendency  toward  diffusion  of  ownership, 

1 223  Federal  Reporter  55. 


THEORY  OF  CONCENTRATION  OF  CAPITAL    171 

as  industrial  corporations  increase  in  size,  by 
which  they  have  gained  strong  support  in  unex- 
pected quarters. 

According  to  the  great  German  revisionist, 
Eduard  Bernstein,  there  were  in  England  in 
the  year  1898  more  than  a  million  shareholders 
in  industrial  corporations.  Spargo  and  Arner, 
writing  in  1912,  said  that  the  shareholders  in  the 
Manchester  Ship  Canal  numbered  40,000,  and 
that  "Lipton's"  had  74,000  shareholders. 

Similar  figures  could  be  given  for  all  of  the 
great  American  industrial  corporations.  Swift 
&  Company  stated  on  January  6,  1921,  that 
they  had  over  40,000  shareholders,  of  whom  more 
than  13,000  were  employees.  In  the  year  1919 
the  Pennsylvania  Railroad  had  117,225  share- 
holders, and  twenty  of  the  principal  railway  com- 
panies of  the  United  States  had  no  less  than 
525,689  shareholders.  In  the  year  1904  these 
railways  had  only  154,610  shareholders.1  Of 
course,  many  of  the  larger  shareholders  are 
counted  more  than  once,  but  there  can  be  no 
doubt  that  there  are  at  least  500,000  individual 
railway  shareholders  in  the  United  States,  and 
one  could  safely  guess  that  there  are  several 
millions  of  separate,  individual  shareholders  in 
industrial,  commercial  and  financial  corpora- 
tions, possibly  5,000,000,  or  more. 

iSlason  Thompson,  Railway  Statistics  of  the  United  States, 
1919,  p.  94. 


172     THEORY  OF  CONCENTRATION  OF  CAPITAL 

Unquestionably,  the  ownership  of  industrial 
corporations  has  been  highly  concentrated,  but 
now  appear  strong  counter-tendencies  toward 
diffusion  of  ownership,  by  which  the  great  cor- 
porations may  be  largely  democratized.  In  such 
an  event  they  will,  like  living  organisms,  change 
with  the  changing  conditions,  and,  without  col- 
lapse or  revolution,  socialization  may  be  indefi- 
nitely postponed. 

As  a  parody  of  the  celebrated  prophecy  of 
Marx,  one  might  say,  with  some  degree  of  prob- 
ability: "Centralization  and  decentralization  of 
the  means  of  production,  with  diffusion  of  owner- 
ship, especially  among  the  workers,  at  last  reach 
a  point  where  producers,  large  and  small,  and 
their  employees  can  meet  on  common  ground. 
The  more  industrious  and  frugal  among  the 
workers,  receiving  both  wages  and  profits,  join 
hands  with  the  management,  and  capitalism, 
adapting  itself  to  the  changing  environment, 
continues  indefinitely." 


X 

THE  MARXIAN  PROPHECY  OF  THE 

ELIMINATION  OF  THE  MIDDLE 

CLASS 

Like  all  Hegelians,  Marx  interprets  human 
life  in  terms  of  contradictions,  which  go  by  twos, 
so  he  finds  in  every  historical  stage  two  chief 
contending  classes:  master  and  slave,  baron  and 
serf,  capitalist  and  proletariat.  Yet,  he  must 
have  known  that  at  all  times  there  have  been 
many  people  who  did  not  belong  to  either  of  the 
opposing  classes,  or  were  partly  in  one  and  partly 
in  the  other. 

So,  while  Marx  sees  in  modern  society  but  two 
great  rival  classes,  he  cannot  ignore  the  millions 
of  unclassified  people — working  capitalists,  prop- 
erty-owning workers,  traders  and  others — who, 
for  lack  of  a  better  word,  are  usually  known  as 
the  middle  class.  Obviously,  they  act  as  a  buffer 
between  the  great  capitalists  and  the  proletari- 
ans, and  are  a  stumbling  block  in  the  way  of 
socialism,  wheref  or  Marx  writes  of  them  in  con- 
temptuous terms,  as  though  their  very  existence 
were  an  impertinence.  He  is  pleased  to  think 

173 


174    ELIMINATION  OF  THE  MIDDLE  CLASS 

of  them  as  a  decadent  and  vanishing  group,  a  sort 
of  vestige,  like  the  vermiform  appendix,  which 
will  be  removed  because  it  no  longer  contributes 
to  human  well-being  and  progress. 

The  Middle  Class. — The  middle  class,  in  the 
view  of  Marx,  are  the  survivors  of  the  once 
powerful,  independent,  enterprising  and  useful 
burghers  or  guildsmen  of  early  times:  master 
craftsmen  and  merchants,  small  proprietors 
working  in  their  little  shops  side  by  side  with 
their  journeymen  and  apprentices,  before  ma- 
chinery and  the  industrial  revolution  came  to 
spoil  the  peace  of  these  happy  industrial  families. 

But  modern  equipment  was  expensive  and 
beyond  the  reach  of  most  merchants  and  manu- 
facturers, so  it  gave  a  tremendous  advantage  to 
those  first  using  it,  enabling  them  to  accumulate 
much  surplus  value,  to  produce  on  a  large  scale, 
to  sell  cheaply,  and,  by  the  power  of  competition, 
to  kill  off  their  weaker  rivals.  Thus  capital  tends 
to  be  concentrated  in  fewer  and  fewer  hands,  the 
middle  class  is  eliminated,  and  the  day  of  revolu- 
tion draws  near.  In  the  Communist  Manifesto, 
Marx  and  Engels  say:  "The  lower  strata  of  the 
middle  class — the  small  tradespeople,  shopkeep- 
ers, and  retired  tradesmen  generally,  the  handi- 
craftsmen and  peasants — all  these  sink  gradually 
into  the  proletariat."1 

i  Communist  Manifesto  (Kerr,  publisher),  p.  23. 


ELIMINATION  OF  THE  MIDDLE  CLASS    175 

Unquestionably,  the  removal  of  the  middle 
class  would  greatly  simplify  the  social  problem, 
making  it  easy  for  the  proletariat  to  expropriate 
the  remaining  capitalists,  but,  with  strange  dis- 
regard of  Hegelian  dialectics,  the  middle  class 
obstinately  refuses  to  disappear. 

Agriculture. — Certainly,  the  European  peas- 
ant is  not  being  eliminated,  and  the  small  farmer 
of  the  United  States,  notwithstanding  the  drift 
toward  the  cities,  continues  to  exist  as  the  largest 
and  most  powerful  single  class  in  the  country. 
In  the  year  1900,  according  to  the  census,  there 
were  in  the  United  States  5,674,875  "farmers, 
planters  and  overseers,"  and  in  the  year  1910 
there  were  5,981,522  people  of  that  class. 

True,  many  of  them  were  tenant  farmers,  and 
tenancy  is  increasing.  In  the  year  1900,  out  of 
5,737,372  farms,  35.3  per  cent  were  occupied  by 
cash  or  share  tenants,  and  in  the  year  1910,  out 
of  6,361,502  farms,  37  per  cent  were  occupied 
by  tenants.  Then,  too,  many  farmers  are  poor, 
many  have  their  farms  mortgaged,  and  many  re- 
ceive but  a  small  "labor  income"  after  allowing  5 
per  cent  interest  on  the  value  of  their  farms. 

But  tenancy  is  usually  a  step  toward  owner- 
ship; mortgages  are  more  often  a  sign  of  pros- 
perity than  the  reverse;  and  the  statistics  of 
"labor  income"  are  very  misleading,  because  they 
apply  only  to  owners,  not  to  tenants,  and  take  no 


176    ELIMINATION  OF  THE  MIDDLE  CLASS 

account  of  the  increase  in  land  values,  which  has 
been  the  farm  owner's  chief  source  of  income  dur- 
ing the  past  twenty  or  thirty  years.  Besides, 
even  poor  farmers,  like  the  peasants  of  Europe, 
are  seldom  revolutionists,  and  their  so-called 
socialism  is  at  bottom  nothing  more  than  mid- 
dle-class radicalism. 

A  good  illustration  of  that  is  the  radical  legis- 
lation passed  in  New  Zealand  in  the  nineties  and 
after,  by  the  Liberal-Labor  Party  of  Ballance, 
Seddon  and  Ward.  The  small  farmers  and  the 
agricultural  laborers,  desiring  to  break  up  the 
great  estates,  formed  an  alliance  with  the  labor 
unions  and  put  through  a  rather  startling  pro- 
gram of  legislation  for  their  mutual  benefit.  But 
when  the  small  farmers  got  what  they  wanted 
they  broke  away  from  the  labor  alliance  and  came 
out  in  their  true  colors  as  faithful  members  of 
the  middle  class — because  they  had  something  to 
lose.  To  the  same  class  belongs  the  radicalism 
of  the  Grangers,  the  Populists  and  the  Progres- 
sives, and  even  the  farmers  of  the  Non-Partisan 
League  who,  with  all  their  experiments  in  "state 
capitalism,"  desire  little  more  than  to  share  the 
profits  of  the  big  capitalists. 

Again,  there  were  in  the  year  1910  no  less 
than  6,088,414  "agricultural  laborers,"  most  of 
whom  were  farmers'  sons,  serving  their  appren- 
ticeship and  expecting  to  become  tenants  or  own- 


ELIMINATION  or  THE  MIDDLE  CLASS    177 

ers  as  soon  as  possible.  If  to  the  total  number 
of  "farmers,  planters  and  overseers"  we  add  only 
half  of  the  agricultural  laborers,  with  gardeners, 
florists,  stock  raisers  and  the  like,  we  have, 
roughly,  more  than  9,000,000  people  of  the  farm- 
ing class,  about  a  fourth  of  all  the  "gainfully  em- 
ployed" in  the  United  States. 

Manufacture. — A  further  examination  of  the 
census  reports  shows  that  the  old  middle  class  of 
small  merchants  and  manufacturers  is  still  very 
numerous.  From  1900  to  1910  the  number  of 
merchants  and  dealers  increased  from  833,212  to 
1,004,157,  and  the  number  of  "manufacturers 
and  officials"  increased  from  243,009  to  565,905. 
Closely  connected  with  these  are  a  number  of 
other  occupations,  such  as  restaurant  keepers, 
bankers  and  brokers,  officials  of  banks  and  com- 
panies, and  so  on,  a  complete  enumeration  of 
whom  would  run  the  number  of  merchants  and 
manufacturers  very  near  to  2,000,000. 

Professions  and  Skilled  Labor. — Then  there 
is  a  new  middle  class,  scarcely  existing  a  hundred 
years  ago,  but  now  numbered  by  millions.  They 
are  not  usually  independent  proprietors,  like 
farmers  or  small  merchants,  but  rather  people  of 
medium  incomes  who  enjoy  a  comfortable  living, 
own  more  or  less  property,  and  are  not  proletari- 
ans in  any  sense  of  the  word.  Such  are  the  so- 
called  "professional"  people,  including  actors, 


178    ELIMINATION  OF  THE  MIDDLE  CLASS 

architects,  artists,  clergymen,  dentists,  engineers, 
journalists,  lawyers,  literary  and  scientific  per- 
sons, musicians,  government  officials,  teachers 
and  professors  in  colleges.  The  total  number  of 
these,  according  to  the  census,  is  1,825,127,  of 
whom  probably  a  small  minority  are  "intellectual 
proletarians." 

Besides  there  are  many  well-paid  agents,  com- 
mercial travelers,  heads  of  departments,  buyers 
and  salesmen.  Again,  there  is  an  enormous 
number  of  small  shareholders  in  manufacturing, 
mercantile  and  financial  corporations  who,  as 
industry  becomes  centralized,  represent  the  de- 
centralization and  diffusion  of  ownership,  a 
movement  scarcely  begun  which  may  go  far 
toward  democratizing  and  popularizing  "big 
business." 

Finally,  we  have  railway  engineers  and  con- 
ductors, carpenters,  bricklayers,  plumbers,  ma- 
chinists and  many  other  unionized  workers,  the 
aristocracy  of  labor,  whose  "wages"  are  higher 
than  the  "salaries"  of  many  soft-handed  workers, 
and  who,  though  wearing  overalls  at  work,  are 
not  to  be  distinguished  from  other  members  of 
the  middle  class  on  Sundays  and  holidays. 

Middle  Class  Dominant. — How  large  the  mid- 
dle class,  all  told,  actually  is,  it  would  be  hard  to 
say,  but  a  rough  guess  may  be  made  on  the  basis 
of  the  figures  given  by  Wilford  I.  King.  If 


ELIMINATION  OF  THE  MIDDLE  CLASS    179 

measured  by  the  ownership  of  property  only,  it 
numbers  about  a  third  of  the  population  of  the 
United  States,  who  own  about  a  third  of  the  total 
wealth.  If  measured  by  income,  as  it  should  be, 
it  includes  more  than  half  of  the  people,  many  of 
whom  have  good  incomes  but  have  accumulated 
little  or  no  property. 

Similar  figures  could  be  given  for  Germany, 
France,  England  and  other  capitalistic  countries, 
to  show  the  extraordinary  persistence  of  the  old 
middle  class  and  the  creation  of  a  new  middle 
class,  unforeseen  by  Marx.  In  answer  to  all  of 
this  Boudin  says,  supporting  Oppenheimer,  that 
Marx  cannot  be  refuted  by  statistics,  as  his 
method  is  not  at  all  statistical.  This  is,  in  effect, 
a  confession  that  the  elimination  of  the  middle 
class,  prophesied  by  Marx,  has  not  yet  come 
about. 

Boudin  claims,  however,  that  the  so-called 
"new  middle  class"  is  not  a  middle  class  at  all, 
because  their  income  is  derived  chiefly  from  labor, 
because  they  do  not  control  such  property  as  they 
own,  and  because  their  thoughts  and  feelings 
about  property  are  very  different  from  those  of 
the  old-time  proprietors.  They  do  not  love  prop- 
erty as  such,  but  only  income,  the  usufruct  of  an 
undivided  interest.  So  they  have  broken  away 
from  the  old  moorings,  the  old  ideals  are  lost,  and 


180    ELIMINATION  OF  THE  MIDDLE  CLASS 

they  are  drifting  toward  the  proletariat,  to  whom 
they  belong. 

Thus  the  argument  shifts  from  the  physical  to 
the  spiritual  plane,  as  the  middle  class,  physically 
still  on  earth,  spiritually  has  passed  away,  for 
it  has  lost  its  soul.  Yet  who  can  show  just  what 
the  middle  class  has  lost  or  the  proletariat  has 
gained? 

Shrewd  as  this  argument  is,  it  is  far  from  con- 
vincing, for  it  is  merely  dispute  about  the  use  of 
words.  Also,  it  is  a  dangerous  argument  for 
socialists  to  use,  because  it  proves  too  much.  If 
there  is  no  new  middle  class,  then  there  is  a  new 
proletariat,  a  proletariat  of  prosperous  workers, 
which  is  a  contradiction  in  terms.  Yet  these 
nameless  ones  are  a  large  and  growing  class  who, 
having  something  to  lose,  are  likely  to  prove  as 
great  an  obstacle  to  socialism  as  the  peasants, 
the  small  farmers,  or  any  other  members  of  the 
old  middle  class. 


XI 

THE  MARXIAN  THEORY  OF  THE 
CLASS    STRUGGLE 

The  Marxian  system  is,  at  bottom,  a  philoso- 
phy of  history,  which  is  probably  the  reason  why 
the  higher  critics  of  socialism  try  to  distinguish 
between  essential  and  non-essential  doctrines. 
Orthodox  socialists  say  that  not  a  single  part  of 
the  great  structure  can  be  taken  away  without 
weakening  or  destroying  the  whole,  but  the  here- 
tics hold  that  the  system  is  strengthened  by  re- 
moving the  temporary  supports,  which  have 
served  their  purpose,  and  allowing  the  edifice  to 
settle  upon  its  main  foundation. 

So  the  revisionists  give  up  or  explain  away  al- 
most all  the  Marxian  theories,  but  they  still  be- 
lieve and  teach  that  the  ruling  classes  have  always 
grossly  exploited  the  mass  of  people,  and  that 
those  masses,  after  long  struggle  against  fright- 
ful tyranny,  are  now  approaching  the  day  of  their 
redemption.  Whether  the  revisionists  can  throw 
part  of  the  faith  overboard  and  save  the  rest  re- 
mains to  be  seen,  but  their  candid  admissions 
serve  to  narrow  the  field  of  discussion  and  bring 

181 


182       THEORY  OF  THE  CLASS  STRUGGLE 

into  bold  relief  their  basic  conception  of  human 
life  and  history. 

With  a  magnificent  gesture  Marx  and  Engels 
begin  the  Communist  Manifesto  thus:  "The  his- 
tory of  all  hitherto  existing  society  is  the  history 
of  class  struggles.  Freeman  and  slave,  patrician 
and  plebeian,  lord  and  serf,  guild-master  and 
journeyman,  in  a  word,  oppressor  and  oppressed, 
stood  in  constant  opposition  to  one  another,  car- 
ried on  an  uninterrupted,  now  hidden,  now  open 
fight,  a  fight  that  each  time  ended,  either  in  a 
revolutionary  re-constitution  of  society  at  large, 
or  in  the  common  ruin  of  the  contending  classes."1 

Hegel  and  Darwin. — Although  the  theory  of 
the  class  struggle  did  not  originate  with  Marx 
and  Engels,  to  them  belongs  the  credit,  such  as 
it  is,  of  having  taken  it  as  the  master-key  of  hu- 
man history.  In  this  they  followed  Hegel,  who 
viewed  the  universe  as  the  gradual  unfolding  of 
ideas  in  a  series  of  conflicts  and  compromises, 
except  that,  with  Fechner  and  the  other  "New 
Hegelians,"  they  reversed  the  process,  placing 
the  material  universe  first  as  determining  alike 
the  character  of  man  and  the  course  of  history. 

This  was  before  the  time  of  Darwin,  whose 
"Origin  of  Species"  appeared  in  1859,  since  when 
socialists  have  tried  to  reconcile  the  theory  of  the 
class  struggle  with  the  Darwinian  theories  of  the 

•L  Communist  Manifesto  (Kerr,  publisher),  p.  12. 


THEORY  OF  THE  CLASS  STRUGGLE       183 

struggle  for  existence  and  natural  selection, 
though  without  much  success.  Yet  as  late  as 
1888,  Engels  said  that  the  theories  of  economic 
determinism  and  the  class  struggle  were  destined 
to  do  for  history  what  Darwin's  theory  had  done 
for  biology.  Giving  the  entire  credit  to  Marx 
he  said:  "That  proposition  is  ...  that  the 
whole  history  of  mankind  (since  the  dissolution 
of  primitive  tribal  society,  holding  land  in  com- 
mon ownership )  has  been  a  history  of  class  strug- 
gles, contests  between  exploiting  and  exploited, 
ruling  and  oppressed  classes;  that  the  history  of 
these  class  struggles  forms  a  series  of  evolution 
in  which,  nowadays,  a  stage  has  been  reached 
where  the  exploited  and  oppressed  class  cannot 
attain  its  emancipation  without,  at  the  same  time, 
and  once  and  for  all,  emancipating  society  at 
large  from  all  exploitation,  oppression,  class  dis- 
tinctions and  class  struggles."  1 

Modern  socialists,  following  Morgan  and  other 
speculative  anthropologists,  usually  think  of 
primitive  society  as  a  sort  of  communistic  Eden, 
in  which  was  little  or  no  private  property,  class 
struggle  or  exploitation  of  any  kind.  This,  how- 
ever, like  most  idealizations  of  the  past,  is  little 
more  than  a  myth.  Dr.  R.  H.  Lowie,  of  the 
American  Museum  of  Natural  History  says,  in 
his  recent  book,  "Primitive  Society"  (1920),  that 

i  Engels,  Preface  to  the  Communist  Manifesto  (1888). 


184       THEORY  OF  THE  CLASS  STRUGGLE 

such  an  assumption  is  "demonstrably  false,"  and 
with  respect  to  land  he  goes  so  far  as  to  say: 
"Thus  the  intensive  study  of  a  single,  though 
vast  area,  leads  to  an  historical  reconstruction 
that  directly  contravenes  the  sociological  dogma 
of  a  primeval  communistic  tenure.  This  condi- 
tion appears  not  as  a  universal,  but  as  a  highly 
specialized  case,  as  a  late  rather  than  an  early  de- 
velopment." 1 

Theory  of  the  Origin  of  Classes. — As  a  matter 
of  fact,  the  Marxian  theory  of  the  class  struggle 
is  as  imaginary  as  the  fiction  of  primitive  com- 
munism. The  story  runs  about  as  follows:  Into 
the  communistic  Eden,  where  there  is  nothing 
worse  than  cannibalism  and  human  sacrifice, 
comes  the  serpent  of  private  property,  after 
which  there  is  slavery,  exploitation,  class  struggle 
and  measureless  agony,  for  thousands  of  years, 
until,  at  the  end  of  the  Roman  Empire,  the  an- 
tagonisms thus  aroused  break  up  the  ancient 
tyranny,  and  the  chaos  of  the  Dark  Ages  takes 
its  place. 

Then,  gradually,  the  Feudal  System  arises,  at 
least  in  western  Europe,  and  a  new  stratification 
is  formed,  with  barons  and  higher  clergy  on  top, 
a  few  burghers  and  free  tenants  in  the  middle, 
and  a  great  mass  of  serfs,  bound  to  the  soil,  at 
the  bottom.  The  class  struggle  is  resumed,  until 

iR.  H.  Lowie,  Primitive  Society,  p.  233. 


THEORY  OF  THE  CLASS  STRUGGLE        185 

the  power  of  the  barons  is  broken,  the  bourgeoisie 
become  strong,  feudalism  passes  away,  and  the 
era  of  modern  commercialism,  capitalism,  and 
wage  slavery  is  ushered  in. 

Under  capitalism  the  class  struggle  still  goes 
on,  but  now  the  proletariat,  emancipated,  concen- 
trated in  large  cities,  increasingly  numerous,  mis- 
erable and  class  conscious,  absorbs  the  middle 
class  and  marches  upon  the  strongholds  of  capi- 
talism. There  the  few  remaining  magnates, 
thinking  to  defend  themselves  with  their  tremen- 
dous engines  of  production,  are  really  digging 
their  own  graves.  Sooner  or  later  the  rising  pro- 
letariat will  sweep  them  all  away,  and,  after  a 
time  of  transition  and  reconstruction,  will  set  up 
the  collective  commonwealth,  the  second  Eden. 

Contradictory  Historical  Data. — This  is  far 
too  simple  for  the  complexity  of  social  variation. 
Even  H.  M.  Hyndman,  the  Nestor  of  British 
Socialism,  in  "The  Evolution  of  Revolution" 
(1921),  does  not  follow  the  strict  Marxian  inter- 
pretation. While  claiming  that  class  struggles 
have  been  continuous  in  the  evolution  of  western 
society,  he  is  unable  to  show  that  they  brought 
about  the  transition  from  slavery  to  feudalism,  or 
from  feudalism  to  capitalism. 

Hyndman  admits  that  forcible  expression  of 
the  class  struggle,  such  as  the  rebellion  of  Roman 
slaves  and  gladiators,  never  accomplished  any* 


186       THEORY  OF  THE  CLASS  STRUGGLE 

thing,  and  that,  if  they  had  succeeded,  slavery 
and  circuses  would  have  gone  on  as  before.  Ro- 
man slavery  passed  away,  he  says,  because  of  the 
scarcity  of  slaves,  the  lack  of  money  with  which 
to  buy  them,  the  increasing  cost  of  their  keep, 
the  increasing  number  of  free  farmers,  coloni  and 
laborers,  the  cost  of  transportation,  and  other  cir- 
cumstances which  made  slavery  unprofitable  or 
impossible. 

Similarly,  the  rebellion  of  serfs  under  feudal- 
ism— the  Jacquerie  of  1358  in  France,  Wat  Ty- 
ler's rebellion  of  1381  in  England,  and  the  Ger- 
man peasants'  war  of  1524-1525 — had  little  to 
do  with  the  decay  of  serfdom.  In  fact,  serfdom 
passed  over  into  free  tenancy  largely  through  the 
desire  of  the  landlords  for  money  rents  in  place 
of  surly  service,  royal  taxation  for  foreign  wars, 
and  other  causes  unrelated  to  class  struggle,  al- 
though in  many  cases  the  desire  of  the  serf  for  the 
freehold  had  its  influence. 

Stratification  in  All  Society. — History  records 
numberless  and  fearful  conflicts,  but  sectional 
rather  than  class  struggles  fill  its  pages.  For  the 
most  part  it  is  clan  again  clan,  city  against  city, 
nation  against  nation.  True,  there  has  been 
stratification  in  every  society,  with  frequent  con- 
flict of  interests,  but  internal  troubles  have  been 
kept  down  by  the  dire  necessity  of  presenting  a 
united  front  against  the  external  enemy.  "High- 


THEORY  OF  THE  CLASS  STRUGGLE       187 

lander  shoulder  to  shoulder"  w£s  not  a  slogan, 
merely,  but  the  first  condition  of  survival  among 
the  warring  Scottish  clans.  Perhaps  the  class 
struggle  of  the  present  day  is  a  phase  of  pacif- 
ism, in  which  modern  nations  indulge  because 
they  fear  no  external  enemy. 

Class  struggles  have  often  played  a  part  in 
history,  especially  in  recent  times,  although  it  is 
easy  to  exaggerate  their  importance  and  not  al- 
ways easy  to  distinguish  them  from  sectional 
quarrels.  In  England,  for  example,  the  guilds- 
men  of  London,  York,  Bristol,  and  other  towns, 
frequently  quarreled  with  the  barons  about  char- 
ters, taxes,  and  other  matters,  but  it  is  not  clear 
whether  such  disputes  are  to  be  regarded  as  true 
class  struggles  or  as  conflicts  arising  from  local 
interests  and  the  antagonism  of  town  and 
country. 

Gradually,  the  towns  grew  in  size,  wealth  and 
power,  especially  in  the  north  of  England,  where 
the  Industrial  Revolution  began,  until  the  mer- 
cantile and  manufacturing  interests  overshad- 
owed the  agricultural,  the  landowners  lost  con- 
trol, and  the  commons  became  supreme.  Thus 
was  accomplished  by  peaceful  means  what  it  took 
a  bloody  revolution  to  bring  about  in  France. 
Throughout  western  Europe  the  same  or  similar 
shifting  of  power  took  place,  though  whether  it 
should  be  interpreted  as  a  class  struggle,  a  sec- 


188       THEORY  OF  THE  CLASS  STRUGGLE 

tional  struggle,  or  a  combination  of  both,  it  is 
hard  to  say.  At  any  rate,  there  was  no  overturn- 
ing of  property  rights,  but  rather  a  shifting  of 
power  from  one  group  of  owners  to  another,  and 
the  opening  of  the  door  by  which  new  men  en- 
tered the  previously  exclusive  upper  class. 

Modern  Conditions. — So  it  is  hard  to  find  a 
clear-cut  class  struggle  until  the  rise  of  the  mod- 
ern working  class  after  the  Industrial  Revolu- 
tion, which  began  in  England  and  soon  spread  to 
other  countries.  It  was  in  England,  naturally, 
that  the  first  great  labor  agitation  began — the 
Chartist  movement  of  the  'thirties  and  'forties — 
which  Marx  and  Engels  thought  would  soon  lead 
to  a  social  revolution.  The  Chartists  proposed, 
however,  only  political  reforms,  the  celebrated 
"Six  Points,"  which  they  failed  to  obtain,  al- 
though all  but  one  have  since  been  granted. 

Since  that  time,  in  every  capitalistic  country, 
the  working  class  has  grown  in  numbers  and 
power,  as  can  easily  be  seen  in  the  great  labor 
union  movement,  the  growth  of  socialist  parties, 
the  passage  of  many  kinds  of  labor  legislation, 
and  the  growing  disposition  of  employers  to  treat 
their  employees  with  consideration  and  respect. 

Marx's  Prophecy  Unfulfilled. — For  all  that, 
the  modern  labor  movement  does  not  seem  to  be 
developing  along  the  lines  laid  down  by  Marx. 
In  the  first  place,  the  middle  class  is  not  disap- 


THEORY  OF  THE  CLASS  STRUGGLE       189 

pearing,  but  is  relatively  increasing,  and  capital- 
ism, by  the  infusion  of  new  blood  from  this  source 
and  from  the  working  class,  is  being  strength- 
ened, even  as  the  land-owners  were  reinforced  by 
the  bourgeoisie  during  the  Industrial  Revolution* 

This  process  correspondingly  reduces  the  fight- 
ing power  of  the  working  class,  for  its  natural 
leaders  are  being  constantly  taken  over  by  the 
employers  as  foremen,  managers  and  owners. 
Besides,  many  young  and  ambitious  workers,  not 
yet  promoted,  are  not  class-conscious  proletarians 
by  any  means,  but  rather  attaches  of  the  capital- 
ist class,  into  which  they  hope  to  be  admitted, 
sooner  or  later. 

Secondly,  the  wage-earners  are  not  fully  or- 
ganized in  any  country,  and  many,  if  not  most  of 
those  who  are,  belong  to  the  aristocracy  of  labor 
and  have  no  revolutionary  ends  in  view.  At  the 
present  time  there  are,  roughly,  6,000,000  organ- 
ized and  20,000,000  unorganized  wage-earners  in 
the  United  States.  The  American  Federation 
of  Labor,  with  4,509,213  members  in  the  year 
1920,  is  organized,  not  for  revolution,  but  for  col- 
lective bargaining,  which  logically  involves  loyal 
co-operation  with  the  employers  and  due  regard 
for  the  interests  of  private  property. 

True,  radical  leaders  like  William  Z.  Foster, 
wish  to  convert  the  A.  F.  of  L.  to  socialism,  but 
there  is  no  immediate  prospect  of  the  success  of 


190       THEORY  OF  THE  CLASS  STRUGGLE 

their  endeavors.  The  labor  unions  of  Europe  are 
far  more  socialistic  than  those  of  the  United 
States,  as  might  be  expected  in  view  of  the  rela- 
tive over-population  of  those  countries  and  the 
lack  of  opportunity  for  the  common  man. 

Third,  there  is  among  organized  laborers  a  no- 
table lack  of  unity  or  solidarity,  and  much  conflict 
of  interests  between  occupational  groups.  The 
interests  of  coal  miners,  railwaymen  and  steel 
workers,  for  example,  are  by  no  means  in  com- 
plete harmony,  and  there  are  vexed  questions  at 
issue  between  bricklayers,  carpenters,  plumbers, 
and  other  members  of  the  building  trades. 

Indeed,  it  often  looks  as  though  the  wage-earn- 
ers of  particular  industries,  such  as  the  railways, 
had  more  in  common  with  the  employers  than 
with  wage-earners  of  other  groups.  Also,  there 
are  serious  conflicts  of  interest  between  the  skilled 
and  unskilled  workers  in  every  trade,  as  is  clearly 
seen  in  the  disputes  between  the  railway  section- 
men  and  the  aristocratic  engineers  and  con- 
ductors. 

The  Triple  Alliance  in  England. — The  group 
conflicts  of  the  working  class  are  well  illustrated 
in  Great  Britain  by  the  notorious  Triple  Alliance 
of  coal  miners,  railwaymen  and  transport  work- 
ers, which,  at  one  time  recently,  seemed  to  have 
the  country  by  the  throat,  and  to  be  holding  up, 
not  the  employers  only,  but  their  fellow-workers 


THEORY  OF  THE  CLASS  STRUGGLE       191 

of  all  other  trades.  Moreover,  the  interests  of 
the  several  members  of  the  Triple  Alliance  are 
by  no  means  identical,  as  high  prices  of  coal  are 
bad  for  both  railwaymen  and  transport  workers, 
as  well  as  for  factory  operatives  and  all  the  rest 
of  the  British  workmen. 

Instead  of  proving  the  solidarity  of  British 
labor,  the  activities  of  this  semi-revolutionary  or- 
ganization point  in  the  opposite  direction  and 
give  rise  to  serious  misgivings  as  to  what  might 
happen  after  the  social  revolution,  when  the  plans 
of  syndicalists  and  guild  socialists  had  been  put 
into  effect. 

Future  of  the  Class  Struggle. — Karl  Marx 
looked  forward  to  an  era  of  perfect  peace,  a  mil- 
lennium in  which  there  would  be  no  classes  and 
therefore  no  class  struggle,  but  in  this  he  contra- 
dicted himself  and  nullified  his  own  theory.  Evi- 
dently the  theory  of  the  class  struggle  proves  too 
much,  for,  if  struggle  be  the  first  condition  of 
progress,  it  must  go  on  after  the  social  revolution, 
in  which  case  the  social  democracy  will  be  in  dan- 
ger of  disruption.  But  if,  as  Marx  believed, 
there  is  to  be  neither  class  nor  group  struggle 
in  the  new  social  order,  progress  will  cease  in 
the  universal  stagnation  of  an  unvarying,  crys- 
tallized and  stereotyped  society. 

The  whole  Marxian  system,  so  consistent  with 
itself  and  so  inconsistent  with  the  facts  of  history, 


192       THEORY  OF  THE  CLASS  STRUGGLE 

is  an  attempt  to  find  a  rational  basis  for  the  class 
struggle  and  the  social  revolution.  That  basis  is 
the  closely  -  knit  series  of  propositions  —  the 
theories  of  value,  surplus  value,  increasing  mis- 
ery and  the  rest — which  have  so  often  been 
weighed  in  the  balance  and  found  wanting.  As 
none  of  these  are  theoretically  sound,  the  so-called 
rational  basis  is  a  myth,  an  illusion,  and  if  the 
class  struggle  goes  on  to  the  bitter  end,  as  it  may, 
with  the  Marxian  conditions  unfulfilled,  it  must 
be  because  man  is  not  primarily  a  rational  animal. 


XII 
THE   SOCIAL  REVOLUTION 

Now  comes  the  final  act  in  the  drama  of  eco- 
nomic determinism,  when  the  last  of  the  antagon- 
isms that  have  convulsed  the  world  since  the  time 
of  primitive  communism  is  about  to  cause  the  col- 
lapse of  capitalism  and  to  clear  the  way  for  the 
communism  that  is  to  be.  To  this  all  the  theories 
of  Marx  lead,  step  by  step ;  here  all  the  lines  of 
argument  converge.  This  is  the  day  of  wrath, 
when  judgment  shall  be  pronounced  and  exe- 
cuted upon  capitalism  and  all  its  works.  '  This  is 
the  day  of  emancipation  that  is  to  usher  in  the 
millennium  of  the  proletariat. 

Karl  Marx,  like  John  the  Baptist,  was  a  voice 
crying  in  the  wilderness,  denouncing  the  wicked- 
ness of  his  day,  preaching  repentance  and  proph- 
esying deliverance.  Doubtless  he  was  a  revolu- 
tionist by  temperament  before  he  was  either 
jurist,  historian  or  economist,  and  he  used  the 
results  of  all  his  studies  to  illustrate  and  reinforce 
his  faith. 

Like  many  of  his  contemporaries,  Marx  was 
very  conscious  of  the  recent  "bourgeois"  revolu- 

193 


194  THE  SOCIAL  REVOLUTION 

tion,  and  felt  that  a  revolution  of  the  working 
class  might  not  be  far  away.  The  Communist 
Manifesto  (1848)  was  a  call  to  arms,  and  it  is 
clear  that  the  writers  expected  the  social  revolu- 
tion to  come  very  soon.  Later  in  life  they  saw 
their  mistake.  In  1895  Engels  wrote:  "History 
proved  that  we  were  wrong — we  and  those  who 
like  us,  in  1848,  awaited  the  speedy  success  of 
the  proletariat.  It  became  perfectly  clear  that 
economic  conditions  all  over  the  Continent  were 
by  no  means  as  yet  sufficiently  matured  for  su- 
perseding the  capitalist  organization  of  produc- 
tion."1 

Method  of  the  Revolution. — However,  one 
must  not  lay  too  much  stress  on  all  the  mistakes 
of  Marx.  As  Boudin  says,  time  has  little  to  do 
with  the  validity  of  his  argument.  Socialists  are 
eager  souls,  hoping  to  see  the  revolution  with 
their  own  eyes,  and  reluctantly  admitting  that, 
in  the  long  process  of  evolution,  a  thousand  years 
are  as  one  day. 

But  what  of  the  method  of  revolution  and  how 
is  the  collapse  of  capitalism  to  come  about?  Will 
there  be  a  great  industrial  crisis,  national  or  in- 
ternational? Marx  and  Engels  thought  so,  but 
the  higher  critics  now  admit  that  this  theory  was 
unsound,  and  that  the  breakdown  of  capitalism 

i  Engels,  Einleitung  zu  Karl  Marats  Die  Klassenkampfe  in 
Frankreich,  1848-1850.  Cf.  Simkhovitch,  Marxism  versus  Social- 
ism, pp.  28,  253. 


THE  SOCIAL  REVOLUTION  195 

must  come  by  the  way  of  concentration  of  capital 
and  the  revolt  of  the  working  class. 

Will  the  revolt  of  the  working  class  be  sud- 
den and  violent,  or  gradual  and  peaceful  in  its 
operation?  Marx  and  Engels  in  their  youthful 
ardor  favored  revolution  by  conspiracy,  after  the 
style  of  Babeuf  and  Blanqui,  although  it  was  flat 
contradiction  of  economic  interpretation.  The 
Communist  Manifesto  closes  with  these  fiery 
words :  "The  Communists  disdain  to  conceal  their 
views  and  aims.  They  openly  declare  that  their 
ends  can  be  attained  only  by  the  forcible  over- 
throw of  all  existing  social  conditions.  Let  the 
ruling  classes  tremble  at  a  Communist  revolution. 
The  proletarians  have  nothing  to  lose  but  their 
chains.  They  have  a  world  to  win.  Working 
men  of  all  countries  unite!"1 

Marx's  Contradictions. — In  the  Neue  Rhein- 
ische  Zeitung  (1849)  Marx  wrote  wild  words 
about  "revolutionary  terrorism,"  and  in  the  fol- 
lowing year  he  wrote:  "Far  from  stopping  so- 
called  excesses,  examples  of  popular  vengeance 
upon  hated  individuals  and  public  buildings,  with 
which  bitter  memories  are  associated,  one  must 
not  only  tolerate  these  examples  but  lead  and 
conduct  them."2 

But  in  the  preface  to  the  "Critique  of  Political 

1  Communist  Manifesto,  p.  68. 

2  Cf.  Simkhovitch,  op.  cit.,  p.  196. 


196  THE  SOCIAL  REVOLUTION 

Economy"  (1859)  Marx  reverts  to  the  logical 
position  of  economic  determinism  in  the  oft- 
quoted  sentence:  "No  social  order  ever  disappears 
before  all  the  productive  forces,  for  which  there 
is  room  in  it,  have  developed ;  and  new  and  higher 
relations  of  production  never  appear  before  the 
material  conditions  of  their  existence  have  ma- 
tured in  the  womb  of  the  old  society."  * 

Darwinism  and  Marx. — Obviously,  there  is  a 
contradiction  between  the  views  of  the  earlier  and 
the  later  Marx,  or  rather,  between  the  two  sides 
of  his  dual  personality.  This  became  more  glar- 
ing after  the  appearance,  in  1859,  of  Darwin's 
epoch-making  book,  "The  Origin  of  Species," 
which  clearly  taught  that,  in  biological  evolution, 
at  least,  new  forms  developed  by  slow,  continuous 
change  along  diverging  lines,  without  leaping 
forward,  backward  or  sideways,  and  without  any 
episode  in  their  evolution  that  could  be  called  a 
revolution. 

Yet  Marx  and  most  of  his  followers,  in  the  un- 
scientific spirit  of  the  Hegelian  logic,  find  an 
apparent  reconciliation  of  the  contradiction  in 
the  life-history  of  plants  and  animals.  Gradual 
development  goes  on  for  a  while,  and  then,  by 
a  sudden  catastrophe  or  revolution,  the  seed  be- 
comes a  seedling,  the  chrysalis  a  butterfly,  the 

iMarx,  A  Contribution  to  the  Critique  of  Political  Economy, 
p.  12.  Translated  by  N,  I,  Stone. 


THE  SOCIAL  REVOLUTION  197 

egg  breaks  and  a  chick  appears,  the  embryo  ma- 
tures and  a  child  is  born. 

It  should  not  be  necessary  to  say  that  analogies 
such  as  these  prove  nothing  with  regard  to  the 
possibility  of  revolution  in  biological  or  social 
evolution.  The  life  history  of  an  individual  re- 
peats the  history  of  every  other  individual  of  the 
same  species.  Metamorphosis  and  birth  are  not 
biological  revolutions,  but,  as  Engels  puts  it,  are 
examples  of  nature  moving  "in  the  eternal  one- 
ness of  a  perpetually  recurring  circle." 

This  is  but  a  single  illustration  of  the  fact  that 
"scientific"  socialism  gains  no  support  by  appeal- 
ing to  modern  science  in  general  and  biology  in 
particular,  as  the  method  and  aims  of  socialism 
and  science  are  wide  apart.  Veblen,  himself  a 
kind  of  super-Marxist,  rightly  says:  "The  fact 
that  the  theoretical  structures  of  Marx  collapse 
when  their  elements  are  converted  into  the  terms 
of  modern  science  should  of  itself  be  sufficient 
proof  that  those  structures  were  not  built  by  their 
maker  out  of  such  elements  as  modern  science 
habitually  makes  use  of."1 

Biological  and  Social  Evolution. — Biology, 
therefore,  gives  no  support  to  Marxism,  but  pos- 
sibly history  and  sociology  may  have  something 
better  to  offer.  Certainly,  social  evolution  is 

iThorstein  Veblen,  The  Place  of  Science  in  Modern  Civiliza- 
tion, p.  437. 


198  THE  SOCIAL  REVOLUTION 

more  rapid  than  biological  evolution.  The  hu- 
man body  has  scarcely  changed  since  the  time  of 
primitive  man,  but  economic,  political,  religious, 
and  other  social  customs  and  institutions  have 
changed  very  much.  Also,  social  movement  may 
be  accelerated,  as  in  the  nineteenth  century,  when 
western  Europe  made  greater  progress  in  ma- 
terial civilization  than  during  the  preceding  fif- 
teen centuries. 

Again,  a  transformation  may  be  so  complete 
as  to  amount  to  revolution.  The  Protestant  Ref- 
ormation was  a  religious  revolution.  The  great 
inventions  of  the  eighteenth  and  nineteenth  cen- 
turies brought  about  an  industrial  revolution. 
The  social  and  political  power  of  the  landed  aris- 
tocracy of  Europe  has  been  supplanted,  to  a 
greater  or  less  extent,  by  the  power  of  manufac- 
turers and  merchants — in  France  by  a  sudden 
and  violent  upheaval,  in  England  by  the  slow 
and  peaceful  methods  of  constitutional  govern- 
ment. The  American  Revolution,  on  the  other 
hand,  was  no  revolution  at  all,  but  a  political 
secession. 

How  Revolutions  Have  Occurred. — The 
Marxian  conception  of  revolution  is  intimately 
connected  with  the  doctrine  of  economic  deter- 
minism and  the  class  struggle.  The  social  revolu- 
tion, according  to  Marx,  is  the  class  struggle 
raised  to  the  highest  power.  It  is  "a  more  or  less 


THE  SOCIAL  REVOLUTION  199 

rapid  transformation  of  the  juridical  and  politi- 
cal superstructure  of  society  arising  from  a 
change  in  its  economic  foundations." 

H.  M.  Hyndman,  in  "The  Evolution  of  Revo- 
lution" (1921)  gives  a  similar  definition:  "Revo- 
lution, in  its  complete  sense,  means  a  thorough 
economic,  social  and  political  change  in  any  great 
human  community.  There  can  be  no  revolution, 
in  this  sense,  until  the  economic  and  social  condi- 
tions are  ripe  for  such  a  change."1 

Reading  history  with  this  conception  in  mind, 
one  finds  few,  if  any,  good  examples  of  social 
revolution.  As  Kautsky  says,  the  disappearance 
of  slavery  in  Europe  came  about  so  impercepti- 
bly that  the  contemporaries  of  the  movement 
took  no  notice  of  it.  The  passing  of  serfdom  in 
western  Europe  was  equally  gradual.  In  neither 
case  did  the  subordinate  classes  overthrow  the 
power  of  their  masters,  nor  was  there  a  complete 
transformation  of  the  social  superstructure. 
Slaves  and  serfs  were  liberated  and  absorbed  by 
the  other  classes,  and  the  respective  countries 
continued  to  be  governed  by  the  land-owning 
aristocracy. 

Even  the  "bourgeois"  revolution  of  the  eight- 
eenth and  nineteenth  centuries,  except  in  France, 
was  not  so  much  an  overthrow  of  the  land-own- 

i  H.  M.  Hyndman,  The  Evolution  of  Revolution,  p.  12. 


200  THE  SOCIAL  REVOLUTION 

ers  by  the  bourgeoisie  as  a  fusion  of  the  two  into 
a  larger  and  more  powerful  capitalist  class. 

Maroc's  Prophecies  Not  Fulfilled. — Up  to  the 
present  time  society  has  obstinately  refused  to 
divide  itself  into  two  great  hostile  camps  as  re- 
quired by  the  theory  of  the  class  struggle.  One 
may  think  of  people  as  divided  into  the  "haves" 
and  the  "have-nots,"  but  that  is  not  to  say  that 
all  the  "haves"  are  supporters  of  capitalism  or 
that  all  the  "have-nots"  would  like  to  see  it  de- 
stroyed. The  line-up  of  interests  and  opinions 
in  the  intricate  network  of  industrial  relations  is 
by  no  means  so  simple. 

In  other  respects,  too,  the  conditions  laid  down 
by  Marx  as  preliminary  to  the  final  revolution 
have  not  been  fulfilled.  In  no  capitalistic  coun- 
try before  the  war  was  the  misery  of  the  working 
class  increasing,  either  absolutely  or  relatively. 
The  middle  class  was  not  being  eliminated,  but 
increasing  in  numbers,  wealth  and  influence. 
Concentration  of  capital  had  not  proceeded  ac- 
cording to  the  Marxian  program,  and  diffusion 
of  ownership  seemed  likely  to  counteract  the  con- 
centration of  wealth.  In  brief,  the  evolution  of 
capitalism  was  not  going  as  Marx  wished  and 
expected,  when  he  wrote,  in  the  first  volume  of 
"Capital"  (1867) :  "Centralization  of  the  means 
of  production  and  socialization  of  labor  at  last 
reach  a  point  where  they  become  incompatible 


THE  SOCIAL  REVOLUTION  201 

with  their  capitalist  integument.  This  integu- 
ment is  burst  asunder.  The  knell  of  capitalist 
private  property  sounds.  The  expropriators  are 
expropriated."1 

Capitalism  Evolutionary. — Here  is  another 
misleading  biological  analogy,  involving  a  curious 
misconception  of  the  nature  and  functions  of 
capitalism,  based,  as  it  is,  on  the  institution  of  pri- 
vate property.  Capitalism  is  no  mere  shell  or 
integument,  within  which  certain  evolutionary 
changes  go  on  until  they  are  "ripe"  for  revolu- 
tion. It  is  the  industrial  organization  itself,  the 
vast  mechanism  of  production,  which  creates  all 
goods  and  services,  and  daily  feeds,  clothes  and 
shelters  hundreds  of  millions  of  people,  with  a 
degree  of  comfort  unknown  to  the  working  class 
of  any  previous  time,  or,  indeed,  to  most  of  the 
aristocrats. 

Structural  changes  take  place  within  this  or- 
ganization, of  course,  because  it  is  living,  growing 
and  adapting  itself  to  the  changing  conditions. 
Indeed,  it  is  far  more  elastic  and  adaptable 
than  any  living  organism,  as  may  be  seen  by 
considering  the  evolution  of  capitalism  in  Europe, 
America  and  elsewhere  during  the  past  hundred 
years. 

In  that  time  the  population  of  all  capitalistic 
countries  has  enormously  increased;  standards 

i  Capital,  p,  789, 


202  THE  SOCIAL  REVOLUTION 

of  living  have  risen;  the  wage-earners  have  be- 
come educated,  ambitious  and  discontented;  new 
lands  have  been  opened  up ;  great  industries  and 
works  of  engineering  have  been  created ;  govern- 
ments have  become  more  democratic;  laws  and 
customs  have  changed ;  business  organization  has 
reached  a  high  degree  of  perfection;  and,  finally, 
business  men  themselves  have  become  more  com- 
petent, more  considerate  of  their  employees,  more 
respectful  to  the  public,  and,  in  general,  more 
ready  to  accommodate  themselves  to  the  chang- 
ing environment.  How,  then,  can  capitalism  be 
thought  of  as  a  rigid  form,  or  fetter,  or  shell,  or 
integument  that  must  be  broken  before  any  new 
and  better  social  order  can  take  its  place? 

Prophecy  of  Final  Overthrow. — In  view  of 
the  fact  that  the  evolution  of  capitalism  has  not 
proceeded  along  Marxian  lines,  inasmuch  as  the 
conditions  preliminary  to  revolution  have  not 
been  fulfilled,  the  prophecy  that  the  working 
class  will  take  over  all  the  means  of  production 
is  nothing  but  a  shrewd  guess  posing  as  a  scien- 
tific demonstration.  With  far  greater  probabil- 
ity one  might  hazard  another  guess,  to  the  effect 
that  the  magnates  of  capitalism,  reinforced  by 
the  middle  class  and  a  large  section  of  the  wage- 
earners,  will  be  able  to  maintain  the  present  in- 
dustrial order,  in  all  its  essential  features,  for  a 
long  time  to  come. 


THE  SOCIAL  REVOLUTION  203 

A  guess  like  this  is  strongly  sustained  by  the 
analogy  of  organic  evolution,  which  proceeds 
along  a  given  line  without  any  considerable  break 
in  continuity  and  is  physically  unable  to  retrace 
its  steps  or  to  leap  across  to  a  different  path  of 
progress.  A  given  organism,  of  course,  may 
ultimately  come  to  a  bad  end,  but  any  attempt  at 
radical  alteration  would  result  in  death. 

If  "scientific"  socialism  has  no  real  proof  to 
give,  if  it  cannot  be  shown  theoretically,  or  by 
appeal  to  fact,  that  social  revolution  is  pre- 
determined by  "the  immanent  laws  of  capitalist 
production  itself,"  then  all  that  socialism  has  to 
offer  is  a  Utopian  ideal  and  many  promises,  which 
the  working  class  may  be  unwilling  to  receive  at 
their  face  value.  Possibly,  before  going  on  a 
wild-goose  chase,  they  may  call  to  mind  the  an- 
cient proverb: 

"A  bird  in  the  hand  is  worth  two  in  the  bush." 

Strength  of  Capitalism. — Over  against  the 
denunciations,  ideals  and  promises  of  socialism, 
with  all  their  power  for  good  or  ill,  capitalism  has 
the  tremendous  advantage  of  possessing  the  field 
as  a  going  concern  which,  with  all  its  faults,  has 
done  great  things  in  the  past  and  may  do  still 
more  in  time  to  come.  Moreover,  it  can  easily  be 
shown,  contrary  to  the  views  of  extreme  socialists, 
like  the  I.  W.  W.,  that  the  working  class  and  the 


204  THE  SOCIAL  REVOLUTION 

employing  class  have  something  in  common. 
This  is  a  basic  principle  upon  which,  enlarged 
and  strengthened,  may  be  built  the  temple  of  co- 
operative capitalism 

If  one  may  judge  by  what  has  happened  in 
many  so-called  revolutions,  economic,  political 
and  religious,  the  capitalist  class,  repenting  of 
their  sins,  will  set  their  house  in  order  and  will 
make  friends  of  many  of  their  former  opponents. 
They  will  be  able  to  prove  to  the  more  competent, 
at  least,  of  the  wage-earners  that  they  have  much 
to  lose  and  nothing  to  gain  by  a  social  revolution. 
In  other  words,  they  will  set  in  motion  a  counter- 
revolution, which  will  postpone  the  threatened 
revolution  of  the  proletariat,  or  make  it  forever 
impossible. 

Reason  or  Passion? — An  alternative  prophecy 
like  this  assumes,  of  course,  with  Marx  and  most 
of  the  revisionists,  that  man  is  a  rational  animal, 
that  truth  is  teachable,  and  that  people,  individ- 
ually and  collectively,  may  be  wisely  led.  These 
are  large  assumptions,  which  history  does  not  al- 
together justify.  It  may  be  that  men  are  gov- 
erhed  chiefly  by  emotion  and  passion,  that  envy 
\  and  jealousy  blind  the  eyes  of  reason,  that  in 
their  ever-expanding  desires  they  cannot  bear  to 
be  thwarted,  and  that,  in  fanatical  frenzy  or  child- 
ish petulance,  they  may  destroy  what  they  can 
never  recreate. 


THE  SOCIAL  REVOLUTION  205 

All  this  is  more  or  less  plausible,  but  it  is  not 
according  to  the  later  and  saner  Marx.  The 
great  anarchist  Bakunin  might  have  sanctioned 
it,  or  the  syndicalist  Sorel,  or  the  I.  W.  W. 
leader,  Bill  Haywood,  or  the  philosopher  Berg- 
son,  or  the  psychologist  Freud,  or  the  sociologist 
Veblen,  or  the  revolutionists  Lenin  and  Trotsky. 
It  agrees  with  revolutionary  terrorism,  and  sa- 
botage, and  the  general  strike,  and  a  strike  in  coal 
mining,  transportation  and  other  basic  industries, 
and  with  Bolshevism  and  the  earlier  Marx,  but  it 
is  out  of  harmony  with  economic  determinism,  the 
evolution  of  revolution,  and  all  the  characteristic 
doctrines  of  "scientific"  socialism. 

"Scientific"  socialism  must  be  judged  by  its 
own  standards,  as  a  rational  system  consisting  of 
a  logical  series  of  propositions  derived  from  cer- 
tain premises.  If  the  premises  be  disproved,  the 
whole  system  falls  to  the  ground  and  cannot  be 
revived  by  the  injection  of  any  foreign  stimulant. 

For  this  reason  the  revisionists,  or  higher  critics 
of  socialism,  having  abandoned  Marx,  are  not 
very  sure  of  anything  except  that  there  is  no 
solid  ground  beneath  their  feet.  In  this  unstable 
condition  they  cannot  well  remain,  so  they  must 
go  forward  or  backward — forward  toward  emo- 
tional, unreasoning  revolutionism,  or  backward 
toward  a  qualified  support  of  capitalism,  coupled 


206  THE  SOCIAL  REVOLUTION 

with  a  faint  hope  that  society  will  be  ripe  for  col- 
lectivism at  some  future  time. 

In  this  latter  position  most  of  the  revisionists 
now  stand,  and  there  is  little  difference  between 
them  and  the  ordinary  progressive  sociologists  or 
social  reformers,  who  know  that  Rome  was  not 
built  in  a  day,  but  who  will  do  all  they  can  to 
mold  and  renovate  society  after  the  pattern  of 
the  ideal  state. 

Emotionalists. — There  are  those,  however, 
who,  conscious  that  Marxism  is  without  rational 
basis,  continue  on  the  road  to  revolution  because 
they  feel  that  it  satisfies  their  emotional  and  ideal- 
istic nature,  which,  in  the  final  test,  they  hold  to 
be  the  only  true  guide.  Concentrating  their  at- 
tention on  the  evils  of  capitalism,  they  are  filled 
with  rage  and  would  destroy  it  with  slight  com- 
punction. Fixing  their  eyes  on  the  beauties  of 
the  new  social  order,  they  are  lost  in  faith  and 
hope,  and,  forgetting  the  difficulties  and  dangers 
of  the  way,  they  raise  the  banner  of  a  holy  war 
— a  children's  crusade. 

It  is  surprising  how  many  revolutionary  lead- 
ers are  of  this  emotional,  imaginative,  idealistic, 
impulsive  type,  and  what  a  strong  appeal  they 
make  to  the  popular  mind,  already  prepared  for 
their  suggestions  by  poverty,  sympathy,  disap- 
pointment, envy,  ambition,  and  all  the  instability 
of  temperament  that  leads  men  to  embrace  a  new 


THE  SOCIAL  REVOLUTION  207 

religion  as  though  it  were  a  great  adventure. 
Throwing  aside  prudence,  reason  and  all  mis- 
givings, they  are  ready  to  take  the  fateful  plunge, 
the  mortal  leap,  though  what  the  outcome  will  be 
for  them  or  for  the  world,  no  man  knows. 


XIII 

BOLSHEVISM    OR    THE    DICTATOR- 
SHIP  OF   THE    COMMUNIST 
PARTY 

The  striking  phrase  "dictatorship  of  the  prole- 
tariat" was  coined  by  Karl  Marx  himself  in  the 
year  1875,  when  in  a  now  famous  letter  he  wrote: 
"Between  capitalist  and  communist  society  lies 
the  period  of  the  revolutionary  transformation 
of  the  one  into  the  other.  This  requires  a  political 
transition  stage,  which  can  be  nothing  less  than 
the  revolutionary  dictatorship  of  the  prole- 
tariat." x 

In  the  Communist  Manifesto  the  same  idea 
was  expressed  in  other  words  thus :  "The  prole- 
tariat will  use  its  political  supremacy  to  wrest, 
by  degrees,  all  capital  from  the  bourgeoisie,  to 
centralize  all  instruments  of  production  in  the 
hands  of  the  state,  i.e.,  of  the  proletariat  organ- 
ized as  the  ruling  class."  2 

The  Communist  Manifesto  gives  also  a  fore- 
cast of  the  measures  which  the  proletariat  of  the 

1  Letter  of  Marx  to  Bracke,  May  15,  1875.     Cited  by  Lenin, 
The  State  and  Revolution,  p.  88.    Cf.  Spargo,  The  Greatest  Failure 
in  All  History,  p.  355. 

2  Communist  Manifesto   (Kerr,  publisher),  p.  40. 


DlCTATOKSHIP  OF   COMMUNIST   PARTY     209 

most  advanced  countries  will  take,  including 
abolition  of  property  in  land,  abolition  of  the 
right  of  inheritance,  confiscation  of  the  property 
of  emigrants  and  rebels,  centralization  of  credit 
and  transportation  in  the  hands  of  the  state,  ex- 
tension of  state  ownership  of  factories,  equal 
liability  of  all  to  labor,  the  establishment  of  in- 
dustrial armies,  and  free  education  of  all  children 
in  public  schools. 

The  program  itself  is  very  simple  and  direct, 
and  there  is  little  dispute  about  it  in  Marxian 
circles,  but  as  to  when  and  how  the  dictatorship 
shall  be  set  up,  and  when  and  how  it  shall  be  dis- 
placed by  communism  pure  and  simple,  there  is 
much  difference  of  opinion,  degenerating  at  times 
into  vehement  debate  and  bitter  persecution. 

The  "Yellows"  and  the  "Reds"—  Socialists  of 
the  chair,  the  pulpit  and  the  parlor,  wishing  to 
make  the  thought  of  revolution  palatable  to  the 
bourgeoisie,  usually  follow  the  later  evolutionary 
Marx  in  teaching  that  the  social  revolution  can- 
not come  until  all  things  are  ready;  and  that,  if 
brought  on  too  soon,  it  must  perish  as  an  un- 
timely birth.  And  when,  in  the  fulness  of  time, 
the  revolution  gently  arrives,  the  "immense  ma- 
jority" of  the  proletariat,  will  set  up  a  dictator- 
ship that  will  not  be  a  dictatorship,  as  it  will  be 
democratic  in  all  its  ways. 

But  the  evolutionists,  the  parliamentarians,  the 


210  DICTATORSHIP  OF  COMMUNIST  PARTY 

cooperators,  the  Fabians,  the  guildsmen,  and  the 
rest  of  the  "good"  or  "yellow"  socialists,  have 
by  no  means  accepted  the  whole  of  the  Marxian 
gospel,  and  the  revolutionary,  violent  faith  of 
the  "reds,"  which  they  have  rejected,  now  holds 
chief  place  in  the  creed  of  the  Communist  Party. 

Nor  is  it  strange  that  the  more  ardent  souls 
embrace  a  more  militant  creed,  for  socialism,  with 
its  fierce  denunciation  of  the  present  world  and 
its  glowing  picture  of  the  world  to  come,  makes 
so  strong  an  appeal  to  the  primitive  instincts  of 
man  that  the  wonder  is  how  any  of  its  votaries 
can  await  patiently  the  long-expected  day,  or 
keep  themselves,  in  thought  and  action,  within 
the  bounds  of  reason. 

The  contradictions  in  the  opinions  and  actions 
of  Marx  himself  are  so  glaring  that  it  is  impos- 
sible to  draw  a  clear  line  of  demarcation,  placing 
all  the  evolutionary,  parliamentary  Marxists  on 
the  one  side,  and  all  the  revolutionary  direct  ac- 
tionists  on  the  other.  Certainly,  the  syndicalists 
do  not  wish  to  be  excommunicated  for  distrusting 
parliamentary  action  and  favoring  the  general 
strike,  nor  do  the  Bolshevists  think  that  they 
deny  Marx  when  they  call  themselves  commu- 
nists, set  themselves  at  the  head  of  the  proletariat, 
and  propose  to  march  direct  from  Egypt  to  the 
Promised  Land  without  going  through  the  wil- 
derness of  capitalism.  However,  they  admit  that 


DICTATORSHIP  or  COMMUNIST  PARTY  211 

the  proletariat  must  pass  through  a  lesser  wilder- 
ness or  purgatory,  the  transitional  dictatorship, 
before  they  can  fully  enjoy  the  blessings  of  com- 
munism. 

Marx  the  Prophet  of  All  Sects. — Of  course, 
the  syndicalists,  the  I.  W.  W.,  the  Bolshevists, 
the  Spartacans  and  all  the  other  impatient,  vio- 
lent sects,  are  tainted  with  anarchism,  even  as 
the  revisionists  and  reformists  are  tinged  with 
reaction,  and  there  are  few  faithful  Marxists  of 
the  original  type  left.  But,  with  all  their  heresies 
and  wilful  ways,  Karl  Marx  is  the  prophet  and 
leader  of  them  all,  his  writings  are  their  sacred 
books,  and  his  system  is  their  standard  authority, 
which  the  various  sects  interpret  according  to 
their  light. 

Some  Russian  socialists  have  inclined  toward 
violent  and  sudden  revolution,  perhaps  because 
of  the  retarded  development  of  their  country, 
the  repressive  policy  of  the  government  and  their 
own  unworldly,  inexperienced  idealism.  Russia 
is  still  mainly  an  agricultural  country,  with  a 
population  of  about  170,000,000  in  the  former 
Empire,  85  per  cent  of  whom  were  commonly 
classed  as  peasants,  most  of  whom  were  quite 
illiterate  and  carried  on  agriculture  in  a  very 
primitive  way. 

The  industrial  proletariat,  composed  of  fac- 
tory and  mine  workers  and  some  others,  did  not 


212  DICTATORSHIP  OF  COMMUNIST  PARTY 

exceed  5  per  cent  of  the  population,  leaving  an 
upper  and  middle  class  of  about  10  per  cent,  in- 
cluding the  land-owning  aristocracy,  the  officials, 
the  professional  people,  and  a  considerable  num- 
ber of  manufacturers  and  merchants. 

Capitalism  had  begun  in  Russia,  but  it  had  not 
gone  far;  and  it  is  no  wonder  that  socialists  be- 
came discouraged  or  impatient,  as  they  looked 
forward  to  long  years  of  industrial  evolution 
before  the  middle  class  should  rise,  fulfill  its  his- 
toric mission,  and  pass  away ;  before  the  peasants 
should  be  expropriated;  and  the  proletariat,  at 
last  comprising  the  "immense  majority"  of  the 
people,  should  be  ready  for  revolution.  Indeed, 
the  outlook  was  hopeless  from  their  point  of  view, 
for,  as  Bernard  Shaw  recently  said:  "If  social- 
ism is  to  wait  until  farmers  become  class-con- 
scious Marxists,  it  will  wait  for  ever."1 

But  many  of  the  Russian  socialists  did  not 
want  to  wait,  and  easily  persuaded  themselves 
that  the  revolution  might  be  brought  about  by 
the  industrial  workers  fighting  as  the  vanguard 
of  socialism,  a  sort  of  Gideon's  Band,  who  would 
be  followed,  as  liberators,  by  the  poorer  peasants, 
then  by  the  middle  peasants,  after  which  there 
would  be  no  class  able  to  withstand  the  united 
army  of  the  proletariat. 

i  Bernard  Shaw,  The  Old  Revolutionist  and  the  New  Revolu- 
tion.    "The  Nation"    (London),  March  12,  1921,  p.  704. 


DICTATORSHIP  OF  COMMUNIST  PARTY  213 

Writing  shortly  after  the  abortive  revolution 
of  1905,  and  looking  forward  to  the  next  revolu- 
tion, Leon  Trotzky  (Bronstein),  then  an  inter- 
national Menshevist,  said: 

"Once  the  proletariat  becomes  master  of  the 
situation  conditions  will  impel  the  peasants  to 
uphold  the  policies  of  a  labor  democracy."1 

Trotzky  then  freely  admitted  that  the  indus- 
trial proletariat,  however  great  their  faith  and 
courage,  could  not  stand  alone,  but  must  receive 
speedy  aid  from  the  Russian  peasants  and  from 
a  proletarian  revolution  in  other  countries,  else 
it  would  soon  collapse.2 

Two  Revolutions  Expected. — Russian  social- 
ists have  always  had  two  revolutions  in  mind: 
a  bourgeois  or  middle-class  revolution  which 
should  overthrow  the  power  of  the  Czar,  the  aris- 
tocracy and  the  bureaucracy,  and  a  proletarian 
revolution  following  sooner  or  later  after  that. 
Naturally,  they  would  help  the  middle  class  in 
the  first  revolution,  though  fully  intending  to 
turn  against  them  in  the  second. 

It  was  a  question,  however,  whether  the  social- 
ists should  try  for  a  proletarian  revolution  soon 
after  the  bourgeois  revolution,  or  wait  until  Rus- 
sia, which  was  backward  industrially,  had  become 
a  fully  developed  capitalistic  country.  This  was 

iLeon  Trotsky,  Our  Revolution   (collected,  translated  and  ed- 
ited by  Moissaye  J.  Olgin),  p.  100. 
2  Ibid.,  p.  144. 


214*  DICTATORSHIP  OF  COMMUNIST  PARTY 

probably  back  of  the  fateful  disruption  of  1903 
in  the  Social  Democratic  Party,  when  the  Bol- 
shevists, under  the  leadership  of  Lenin  (Ulia- 
nov),  stood  for  methods  of  conspiracy  in  revo- 
lutionary tactics,  and  a  party  organization  closed 
to  all  but  professional  revolutionists;  while  the 
Menshevists,  including  most  of  the  "intelligent- 
sia," favored  more  open  political  tactics  and  a 
party  organization  admitting  all  sympathizers 
with  the  Socialist  cause.  In  other  words,  the 
Bolshevists  were  the  "close  communionists"  of 
the  social  revolution. 

Both  Lenin  and  Trotzky  took  part  in  the  revo- 
lution of  1905,  following  the  disastrous  war  with 
Japan,  and  in  the  general  strike  of  October, 
which  compelled  the  Czar  to  promise  a  constitu- 
tion and  to  convene  the  first  Duma.  During  the 
general  strike  the  first  Council  of  Workmen's 
Deputies  was  formed  in  St.  Petersburg,  to  act 
as  the  center  of  the  revolution  and  to  be  the 
nucleus  of  a  revolutionary  labor  government. 
Similar  councils  sprung  up  in  many  other  in- 
dustrial centers,  but  all  were  dispersed  as  soon 
as  the  government  began  to  get  the  upper  hand. 

Forecasting  the  course  of  the  next  revolution, 
Trotzky  said,  in  1908:  "The  first  new  wave  of 
the  revolution  will  lead  to  the  creation  of  Soviets 
all  over  the  country.  An  All-Russian  Soviet, 
organized  by  an  All-Russian  Labor  Congress, 


DICTATORSHIP  OF  COMMUNIST  PARTY  215 

will  assume  leadership  of  the  local  elective  or- 
ganizations of  the  proletariat." 

The  revolution  of  1905  was  largely  a  failure, 
although  the  Duma  was  convened  from  time  to 
time  and  Russia  maintained  the  semblance  of  a 
constitutional  government.  Reaction  followed, 
with  the  usual  measures  of  suppression,  which 
succeeded  for  a  time,  but  after  a  few  years  a  new 
revolutionary  movement  began,  which  gradually 
gained  the  support  of  all  the  progressive  forces 
of  the  country,  though  led,  as  in  1905,  by  the  St. 
Petersburg  proletariat.  In  July,  1914,  no  less 
than  400,000  workers  of  St.  Petersburg  went  on 
a  political  strike,  and  barricades  were  erected  in 
the  streets.  Then  the  great  war  broke  out  and 
internal  troubles  were  forgotten,  for  a  time. 

The  Revolution  of  1917. — As  the  war  went  on, 
the  inefficiency,  corruption  and  treason  of  the  au- 
tocracy brought  disaster  after  disaster,  until  at 
the  end  of  1916  the  Russian  armies  were  retreat- 
ing, vast  areas  of  Russian  territory  were  occupied 
by  the  enemy,  the  economic  system  was  breaking 
down,  and  the  government  seemed  to  be  on  the 
point  of  making  peace  with  the  Central  Powers. 
The  country  again  reached  the  boiling  point  of 
revolution,  with  public  demonstrations,  until,  on 
March  11,  1917,  the  crisis  came,  the  soldiers 
joined  the  revolutionists,  and  the  power  of  the 

i  Trotsky,  op,  cit.,  p,  160. 


216  DICTATORSHIP  OF  COMMUNIST  PARTY 

autocracy  was  gone.  On  March  15  the  Czar 
abdicated. 

As  Trotzky  had  predicted,  informal  commit- 
tees or  councils  or  Soviets  were  immediately  or- 
ganized, first  among  the  workmen  of  Petrograd, 
then  among  the  soldiers  and  sailors,  and  presently 
among  workmen  and  peasants  everywhere.  The 
Petrograd  Council  of  Workers'  Deputies  took 
the  lead,  with  Tchcheidze,  a  Social  Democrat,  as 
President,  and  Kerensky,  then  a  member  of  the 
Labor  Party,  as  Vice-President.  The  Duma, 
failing  to  preserve  the  monarchy,  organized  a 
provisional  government  under  Prince  Lvov,  and 
began  to  arrange  for  the  election  of  a  Constituent 
Assembly. 

After  that  the  country  drifted,  with  a  dual  gov- 
ernment, and  no  strong  personality  to  take  the 
lead.  The  weakness  of  the  middle  class  was  re- 
flected in  the  vacillation  of  the  Duma,  and  the 
intoxication  of  the  masses  in  the  disorderly 
behavior  of  the  Soviets. 

A  National  Congress  of  Workers'  and  Sol- 
diers' Deputies  was  called  on  April  16;  an  All- 
Russian  Congress  of  Peasants  met  in  Petrograd 
on  May  17;  and  another  All-Russian  Congress 
opened  on  June  22,  resulting  in  the  election  of 
the  All-Russian  Council  of  Workers',  Soldiers' 
and  Peasants'  Deputies,  with  an  Executive  Com- 


DICTATORSHIP  OF  COMMUNIST  PARTY  217 

mittee  more  powerful  than  the  Provisional  Gov- 
ernment itself. 

With  all  this  there  was  much  disorder,  with 
infinite  variety  of  opinion  and  incessant  debate, 
while  military  discipline  was  relaxed,  soldiers  and 
sailors  deserted,  workers  took  control  of  factories, 
and  peasants  seized  and  divided  many  of  the 
great  estates. 

Bolshevists  Secure  Control. — Meanwhile,  the 
more  radical  elements  gained  control  in  the 
Duma  and  in  the  Soviets.  The  middle-class  cabi- 
net of  Prince  Lvov  and  Professor  Miliukov  was 
replaced  by  that  of  Kerensky,  whose  dramatic 
career  lasted  until  the  November  revolution.  The 
Soviets  passed  from  the  control  of  the  Social 
Revolutionists  and  the  Menshevists  into  the 
hands  of  the  Bolshevists,  who  had  a  more  definite 
program  in  mind. 

Hearing  that  revolution  was  impending,  the 
exiles  gathered  from  Siberia  and  from  foreign 
lands.  With  the  connivance  of  Germany,  wish- 
ing to  foment  more  trouble,  Lenin  and  about  one 
hundred  revolutionists  of  various  factions  came 
from  Switzerland  in  a  special  train.  Trotzky 
sailed  from  New  York,  was  detained  for  a  time 
in  Halifax,  but,  released  at  the  request  of  Pro- 
fessor Miliukov,  he  made  his  way  to  Petrograd 
to  play  his  part  in  the  proletarian  revolution. 

The  war  went  on  more  disastrously  than  ever, 


218  DICTATORSHIP  OF  COMMUNIST  PARTY 

until  the  Germans  were  at  Riga,  almost  within 
striking  distance  of  Petrograd.  The  Kerensky 
government  could  not  handle  the  situation,  and 
there  was  fear  of  reaction,  especially  after  the 
futile  revolt  of  General  Kornilov,  on  September 
9.  The  Preliminary  Parliament,  which  met  on 
October  8,  passed  a  vote  of  confidence  in  the 
Kerensky  ministry,  though  by  a  small  majority. 
Before  that  the  Bolshevist  members,  numbering 
53  out  of  555  delegates,  had  left  the  Parliament, 
protesting  that  it  favored  the  bourgeoisie. 

Then  the  Bolshevists,  through  the  Petrograd 
Soviet,  seeing  their  opportunity,  determined  to 
make  a  great  stroke,  by  seizing  the  political 
power  in  the  name  of  the  Russian  proletariat. 
On  November  4  they  organized  a  great  demon- 
stration in  the  streets  of  Petrograd,  when  the 
people  clamored  for  peace,  for  bread,  for  the 
downfall  of  Kerensky  and  for  "all  power  to  the 
Soviets." 

The  Coup  d'etat. — Then  came  the  "coup 
d'etat"  of  November  7  (October  25,  old  style), 
when  the  Bolshevists,  with  the  help  of  detach- 
ments of  soldiers  and  sailors,  surrounded  the 
Winter  Palace,  arrested  the  provisional  govern- 
ment, and  declared  Kerensky,  who  had  escaped, 
an  offender  against  the  state.  In  a  similar  man- 
ner they  seized  the  political  control,  which  they 
have  held  by  force  until  the  present  time.  Thus 


DICTATORSHIP  OF  COMMUNIST  PARTY  219 

was  accomplished  by  a  few  determined  men  what 
has  often  been  done  by  military  leaders  in  an- 
cient and  modern  times,  and  thus  was  set  up  the 
so-called  dictatorship  of  the  proletariat,  or  rather, 
the  dictatorship  of  the  Communist  Party. 

At  the  time  of  the  revolution  the  Bolshevists 
were  a  minority  of  Russian  socialists,  and  were 
denounced  by  the  Menshevists,  the  Socialist  Rev- 
olutionists of  the  Right  and  the  Executive  Com- 
mittee of  the  All-Russian  Council  of  Peasants. 
In  the  elections  for  the  Constituent  Assembly,  on 
November  25,  they  obtained  less  than  one-third 
of  the  votes  cast.  The  Assembly  was  formally 
opened  on  January  18, 1918,  and  when  it  refused 
to  obey  the  orders  of  the  Bolshevists  it  was  curtly 
dismissed  by  the  guards. 

The  Military  Revolutionary  Committee  was 
succeeded  by  the  People's  Commissars,  composed 
almost  exclusively  of  members  of  the  Communist 
Party,  with  Lenin  as  President  and  Trotzky  as 
Minister  of  Foreign  Affairs,  and  this  arrange- 
ment was  sanctioned  by  the  Second  All-Russian 
Congress  of  Soviets,  in  session  on  the  day  of  the 
revolution.  On  July  10,  1918,  the  Fifth  Con- 
gress of  Soviets  adopted  the  Constitution  of  the 
Russian  Socialist  Federated  Soviet  Republic.1 

iFor  further  details  see  A.  J.  Sack,  The  Birth  of  the  Russian 
Democracy,  New  York,  1918;  John  Spargo,  Bolshevism,  New  York, 
1919;  H.  W.  Laidler,  Socialism  in  Thought  and  Action,  New  York, 
1920,  pp.  308-358. 


F 


220  DICTATORSHIP  or  COMMUNIST 

The  Central  Executive  Committee. — Accord- 
ing to  the  Constitution,1  the  All-Russian  Con- 
gress of  Soviets  is  the  supreme  power  and  is  con- 
voked by  the  Executive  Committee  at  least  twice 
a  year.  This  congress,  numbering  about  1,500 
members,  is  composed  of  representatives  of  the 
urban  Soviets  (one  delegate  for  25,000  voters), 
and  provincial  congresses  of  Soviets  (one  delegate 
for  125,000  voters).  The  city  proletariat  are 
thus  given  predominant  power. 

The  executive  power  is  in  the  hands  of  the  Ail- 
Russian  Central  Executive  Committee,  of  not 
more  than  200  members,  elected  by  the  Congress, 
which  again  elects  an  inner  circle  of  17  members : 
the  Council  of  People's  Commissars.  The  whole 
organization  is  controlled  by  the  Communist 
Party,  an  exclusive  organization  of  some  600,000 
men  and  women,  chiefly  industrial  workers,  with 
relatively  few  intellectuals:  daring,  devoted, 
ruthless,  fanatical  conspirators,  the  backbone  of 
the  revolution.  The  dictatorship,  then,  is  in  the 
hands  of  a  fraction  of  the  urban  proletariat,  a 
minority  of  a  minority.  Brailsford  says:  "With 
the  Soviets,  the  trade  unions,  the  cooperatives  and 
the  army  under  its  control,  the  Communist  Party 
commands  the  whole  organized  life  in  Russia."  2 

i  Russian  documents,  etc.,  No.  136,  March,  1919.  Published  by 
the  American  Association  for  International  Conciliation,  New 
York  City. 

2H.  N.  Brailsford,  in  The  New  Republic,  Dec.  22,  1920. 


DICTATORSHIP  OF  COMMUNIST  PARTY  221 

The  Peasantry. — After  the  March  revolution 
the  peasants,  who  already  owned  over  60  per 
cent  of  the  land,  seized  much  of  the  remaining 
land  and  divided  it  among  themselves.  The  Pro- 
visional Government  was  carefully  preparing  a 
comprehensive  land  act,  but  the  Bolshevists  cut 
the  tangled  knot  by  the  decree  of  November  7, 
1917,  announcing  the  confiscation  of  all  landed 
estates,  yet  leaving  the  peasants  in  undisturbed 
possession  of  the  land  they  had  seized.  Complete 
socialization  of  land  was  provided  in  later  decrees. 
After  this,  for  a  time,  the  peasants'  Soviets  were 
recognized  by  the  Communist  government  as  the 
foundation  of  the  whole  system  of  agricultural 
production  and  as  the  basic  units  of  government 
in  the  rural  districts. 

But  soon  the  peasants'  Soviets  proved  far  from 
satisfactory,  at  least  from  the  national  point  of 
view,  as  they  cared  only  for  local  interests  and 
held  their  grain  at  exorbitant  prices.  The  Food 
Commissars  intervened,  with  the  help  of  the  poor- 
est peasants,  organized  into  Committees  of  the 
Poor  by  decree  of  June  11,  1918,  and  thus  re- 
duced the  power  of  the  Soviets,  especially  where 
they  were  controlled  by  the  rich  or  the  middle 
peasants,  who  were  hoarding  grain. 

Later,  the  Bolshevists  tried  to  conciliate  the 
middle  peasants,  and  even  promised  to  let  the 
rich  peasants  alone,  if  they  would  refrain  from 


222  DICTATORSHIP  OF  COMMUNIST  PARTY 

counter-revolutionary  tendencies.  But  neither 
promises  nor  threats  could  make  the  peasants 
part  with  their  produce  at  legal  prices,  except 
when  requisitioned  by  the  government.  Also,  the 
seizing  of  produce  and  the  bad  treatment  of  the 
rich  and  middle  peasants  reduced  the  surplus, 
decreased  production,  and  caused  food  to  rise  to 
famine  prices.  In  these  and  other  ways,  the 
peasants,  as  Marx  had  foreseen,  and  as  Trotzky 
had  specifically  prophesied,  proved  the  greatest 
stumbling-block  in  the  way  of  communism. 

The  Russian  peasants,  in  their  newly  won  lib- 
erty, may  have  been  peculiarly  intractable,  but 
certainly  the  Bolshevists,  with  their  traditional 
dislike  of  all  peasants,  especially  the  more  pros- 
perous, have  sadly  mismanaged  the  whole  agra- 
rian problem.  As  early  as  July  2,  1919,  an 
American  representative  reported  as  follows : 

"The  agricultural  situation  is  desperate.  All 
farm  equipment  stolen  from  the  landlords'  es- 
tates at  the  beginning  of  the  revolution  is  now 
spoiled  and  there  is  no  one  to  repair  it,  and  it 
would  not  be  of  much  use,  anyway,  as  there  are 
no  seeds,  and  persons  possessing  do  not  intend 
sowing  them,  but  try  to  sell  them  on  the  sly,  as 
the  Bolsheviks  took  the  last  autumn  crop  from 
the  peasants  at  a  low  figure.  Peasants  just  cul- 
tivate sufficient  for  their  own  needs  and  a  quan- 
tity, which  is  allowed,  is  kept.  Former  private 


DICTATORSHIP  OF  COMMUNIST  PARTY   223 


estates  are  managed  by  a  commission  of  all  kinds 
of  rabble  or  by  a  soviet  steward." 

Writing  in  May,  1920,  Spargo  gives  an 
equally  gloomy  picture  of  rural  conditions,  tell- 
ing how  the  peasants  quarreled  with  one  another 
about  the  division  of  the  land,  how  they  resisted 
the  Food  Commissars  requisitioning  food  sup- 
plies, how  they  hoarded  grain,  how  production 
fell  off,  how  there  was  a  scarcity  of  food  in  rural 
districts  as  well  as  in  the  cities,  and  how  the  whole 
policy  and  behavior  of  the  Bolshevists  further 
brutalized  the  life  of  the  peasants,  deepened  their 
old  distrust  of  government,  fostered  anarchy, 
and  restored  the  most  primitive  methods  of  liv- 
ing and  working.2 

So  effective  was  the  peasants'  resistance,  both 
active  and  passive,  that  the  failure  of  commun- 
ism in  Russia  has  been  laid  at  their  doors.  Not 
long  ago  Radek  said : 

"Naturally,  we  know  quite  well  that  we  haven't 
communism  at  all  in  Russia  now.  The  peasant 
has  beaten  us."  s 

The  Industrial  Workers. — The  history  of  the 
industrial  workers'  Soviets  has  been  very  similar. 
After  the  November  revolution,  the  Bolshevists, 

1  Certain  Aspects  of  the  Bolshevist  Movement  in  Russia,  p.  35. 
American  Association  for  International  Conciliation,  New  York 
City,  March,  1920. 

2  Spargo,  The  Greatest  Failure  in  All  History,  pp.  90-140. 

a  Henry  G.  Alsberg,  Russia :  Smoked  Glass  vs.  Rose  Tint.  "The 
Nation,"  June  15,  1921. 


224?  DICTATORSHIP  OF  COMMUNIST  PARTY 

instead  of  giving  all  power  to  the  Soviets,  as  they 
had  promised,  tried  to  reduce  their  injurious 
activities.  Lenin  himself  favored  employment 
of  technical  experts  at  high  salaries,  and  even 
advised  the  introduction  of  the  Taylor  system  of 
efficiency  engineering.  And  when,  in  March, 
1919,  L.  B.  Krasin  undertook  the  reorganization 
of  Russian  industry,  he  insisted  on  restoring  old 
and  tried  methods  of  factory  management,  nar- 
rowly limiting  the  powers  of  the  workers'  coun- 
cils. Evidently,  the  soviet  organization  was 
found  quite  unsuited  to  the  conduct  of  business, 
as  Schaffle  and  other  critics  predicted  many  years 
ago.1  Pasvolsky  says: 

"The  conflict  of  authority,  the  disproportion- 
ate growth  of  the  managing  personnel  and  the 
absence  of  efficiency  due  to  lack  of  coordination 
among  the  various  parts  of  the  system  are  all 
characteristic  of  the  whole  system  in  its  largest 
ramifications.  They  are  all,  in  the  final  analysis, 
attributable,  of  course,  to  the  human  elements  in 
the  system."  2 

The  trade  unions,  too,  soon  found  that  they 
were  under  a  system  of  compulsory,  militarized 
labor,  where  a  strike  was  equivalent  to  mutiny 
and  treason.  The  ruthless  punishment  of  the 
Petrograd  strikers  of  March,  1919,  and  the  sup- 

1  Schaffle,  The  Impossibility  of  Social  Democracy,  1885. 

2  Leo  Pasvolsky,  Economic  Problems  that  Soviet  Russia  has  Not 
Solved.     "The  Annalist,"  March  14,  1921. 


DICTATORSHIP  OF  COMMUNIST  PARTY  225 

pression  of  many  unions,  clearly  showed  that  the 
unions  were  no  longer  fighting  organizations,  but 
subordinate  agencies  of  the  central  power. 
Spargo  says:  "The  Bolsheviki  had  been  forced 
to  recognize  the  fundamental  weakness. of  every 
form  of  syndicalism,  including  sovietism.  They 
had  found  that  the  Soviets  were  not  qualified  to 
carry  on  industry  efficiently;  that  narrow  group 
interests  were  permitted  to  dominate,  instead  of 
the  larger  interests  of  society  as  a  whole.  The 
same  thing  was  true  of  the  trade  unions."1 

However,  there  has  recently  been  a  reaction 
against  centralization  and  military  control,  and 
the  Soviets  and  trade  unions  seem  to  be  asserting 
themselves  once  more.  Both  the  conference  of 
trade  unions  in  November,  1920,  and  the  Eighth 
All-Russian  Congress  of  Soviets  in  December, 
favored  reducing  the  power  of  the  People's  Com- 
missars and  increasing  that  of  the  Central  Exec- 
utive Committee.  These  murmurings  show  that 
the  Russian  people  are  restless  under  the  dicta- 
torship of  the  Communist  Party,  and  that  there 
is  a  tendency  toward  decentralization,  which  may 
lead  to  reaction,  if  not  to  anarchy.  Commenting 
on  this  situation  Farbman  says:  "The  real  and 
fundamental  cleavage  is  between  these  factions 
(including  Lenin  and  Trotzky)  and  the  Labor 
Opposition,  which  represents  the  non-partisans, 

i  Spargo,  The  Greatest  Failure  in  All  History,  p.  25C. 


226  DICTATORSHIP  OF  COMMUNIST  PARTY 

now  the  biggest  party  in  Russia.  The  Commu- 
nist Party  remains  the  ruling  force  in  the  politics 
of  Russia,  but  within  it  there  is  working  a  power- 
ful democratic  section.  The  ferment  in  the  Com- 
munist Party  and  the  awakening  of  the  non- 
partisan  masses  undoubtedly  marks  a  crisis  in  the 
progress  of  the  Russian  Re  volution. " 1 

Economic  Breakdown. — As  is  well  known,  the 
industrial  system  of  Russia  is  in  a  bad  way.  The 
falling  off  in  production  of  most  raw  materials 
and  manufactured  goods  has  been  enormous,  so 
that  the  cities,  lacking  food  and  fuel,  are  being 
depopulated,  and  the  country  districts,  lacking 
clothing,  shoes,  salt,  petrol,  farm  implements  and 
many  other  things,  are  reverting  to  primitive 
ways  of  living.  The  railways  have  run  down, 
factories  are  short  of  coal  and  raw  materials,  ma- 
chinery has  become  unusable,  business  men  have 
become  common  laborers,  many  of  the  technical 
experts  have  disappeared,  and  there  is  a  serious 
shortage  of  labor,  as  great  numbers  of  the  indus- 
trial workers  have,  regardless  of  severe  penalties 
for  desertion,  fled  to  the  country  in  search  of 
food. 

Then,  too,  the  vast  issues  of  paper  money  and 
the  fixing  of  maximum  prices  have  greatly  ag- 
gravated the  situation,  causing  prices  to  rise  to 

i  Michael  Farbman,  The  Ferment  in  the  Communist  Party  in 
Russia,  "The  New  Statesman,"  March  5,  1921. 


DICTATORSHIP  OF  COMMUNIST  PARTY  227 

fabulous  figures,  encouraging  smuggling  and 
"spekulatsia,"  and  creating  a  new  class  of  illicit 
dealers  whose  profiteering  is  worse  than  anything 
known  before  the  war.  In  other  respects,  also, 
notably  the  appalling  decline  of  the  birth-rate  and 
increase  of  the  death-rate,1  Russia  has  suffered 
terribly  since  the  Bolshevist  revolution,  although 
her  misfortunes  are  not  attributable  to  that  alone. 
In  a  recent  article,  Olgin  says : 

"The  conditions  are  trying,  indeed.  There  is 
hunger  in  Russia.  Not  hunger  for  bread  and 
potatoes,  perhaps,  but  hunger  for  the  most  ordi- 
nary necessities  of  life.  There  is  no  white  bread 
in  the  cities  of  Russia  and  very  little  meat  or  but- 
ter or  sugar  or  fat.  Milk  and  eggs  are  being 
given  only  to  children,  seldom  to  the  sick. 
Throughout  my  six  months'  sojourn  in  the  Rus- 
sian provinces  I  saw  no  chocolate,  no  oranges  or 
lemons,  no  coffee,  no  tea,  no  cake.  No  tramways 
are  running  in  the  cities  of  Russia,  no  lamps  are 
burning  in  the  streets  outside  of  Moscow.  In  the 
winter  water  pipes  are  bursting,  canalization  and 
sewage  systems  collapse,  misery  and  hideous  suf- 
ferings are  inflicted  on  millions.  There  is  a 
scarcity  of  medicines  and  soap  and  an  abundance 
of  disease.  The  peasants  have  enough  to  eat,  yet 

*In  the  year  1917  the  Russian  birth-rate  was  29.5  per  thousand 
inhabitants,  while  the  death-rate  was  21.5  per  thousand;  in  1919 
the  birth-rate  was  13  and  the  death-rate  75.  Cited  from  the 
statistics  of  the  Commissariat  of  Health  and  Hygiene  by  Professor 
S.  Zagorsky,  in  "Le  Monde  Nouveau,"  February,  1921. 


228  DICTATORSHIP  OF  COMMUNIST  PARTY 

rural  Russia  is  clamoring  for  salt  and  kerosene 
and  cotton  fabrics  and  nails  and  flour  and 
scythes."1 

These  and  many  other  misfortunes  are  attrib- 
utable in  part  to  the  disorganization  caused  by  the 
Great  War  and  the  civil  wars  following,  in  part 
to  the  blockade,  but  chiefly  to  the  attempt  by  the 
Bolshevists  to  create  a  new  system  upon  the  ruins 
of  the  old.  In  this  connection,  H.  G.  Alsberg 
says:  "A  goodly  share  of  the  misery  in  Russia 
to-day  has  been  due  to  the  stupid,  deadening  dog- 
matism, the  corruption,  the  frightful  bureau- 
cracy, the  tyranny,  the  disdain,  the  contempt  for 
what  we  western  'bourgeois'  would  call  person- 
ality, the  individual,  which  have  been  character- 
istic of  Russian  Marxism  as  distinguished  from 
Russian  human  nature.  Lenin  again  and  again 
has  pointed  out  that  the  communist  regime  has 
been  not  only  stupid  but  almost  insanely  doc- 
trinaire."2 

Individual  Liberty  Suppressed. — Much  more 
could  be  said  concerning  the  failure  of  commun- 
ism in  Russia,  which  has  been  recognized  by  most 
of  the  foreign  observers,  notably  those  of  socialist 
faith  or  leanings.  M.  J.  Olgin  says  that  there  is 
no  personal  liberty  in  Russia,  no  political  free- 

1  Moissaye  J.  Olgin,  Mechanics  of  Power  in  Russia,  "The  New 
Republic,"  June  15,  1921. 

2  Henry  G.  Alsberg,  "Russia:  Smoked  Glass  vs.  Rose  Tint,  "The 
Nation,"  June  15,  1921. 


DICTATORSHIP  OF  COMMUNIST  PARTY   229 

dom  and  no  equality.  The  peasants  are  deprived 
of  their  crops  without  receiving  the  equivalent 
in  manufactured  goods ;  the  workingman  is  bound 
to  his  factory  or  mine  and  cannot  move  without 
a  permit  from  the  labor  organization,  which  is 
controlled  by  the  state;  he  cannot  go  on  strike, 
and  is  compelled  to  participate  in  the  activities  of 
the  union.  The  bourgeois  parties,  of  course,  are 
under  the  ban,  but  the  Menshevists  and  the  So- 
cialist Revolutionists,  even  those  of  the  Left 
Wing,  are  prevented  from  issuing  newspapers 
and  magazines  or  pamphlets  and  are  forbidden 
to  call  open  meetings  of  their  own.  Moreover, 
there  is  not  even  liberty  of  speech,  as  the  people 
are  in  fear  of  the  Extraordinary  Commission  for 
Combating  Counter-revolution,  which  has  prac- 
tised all  the  methods  of  the  Vehm  Gericht  and 
the  Spanish  Inquisition.1 

Civilization  in  Peril. — Writing  from  a  more 
theoretical  point  of  view  the  well-known  English 
mathematician,  theoretical  anarchist  and  pro- 
fessed guild  socialist,  Bertrand  Russell,  said, 
after  visiting  Russia  in  May  and  June,  1920 : 

"For  my  part,  after  weighing  this  theory 
(revolutionary  communism)  carefully  and  after 
admitting  the  whole  of  its  indictment  of  bour- 
geois capitalism,  I  find  myself  definitely  and 
strongly  opposed  to  it.  .  .  .  I  cannot  sup- 

i  Olgin,  in  "The  New  Republic,"  June  15,  1921. 


230  DICTATORSHIP  OF  COMMUNIST  PARTY 

port  any  movement  which  aims  at  world  revolu- 
tion. The  injury  to  civilization  done  by  revolu- 
tion in  one  country  may  be  repaired  by  the 
influence  of  another,  in  which  there  has  been  no 
revolution;  but  in  a  universal  cataclysm  civiliza- 
tion might  go  under  for  a  thousand  years." 

Besides  all  this,  many  observers  have  noted  the 
cultural  and  moral  decadence  that  has  accom- 
panied the  decline  of  material  civilization.  Apart 
from  the  damage  that  has  been  done  to  the 
Church,  to  religious  life  and  moral  standards, 
science  and  art  have  suffered  grievously,  through 
the  death,  impoverishment  and  exile  of  many  of 
Russia's  most  distinguished  men.  The  case  of 
the  Russian  scholars  alone  is  sufficient  illustration 
of  what  has  happened  in  other  cultured  circles. 
Professor  Rostovtsef ,  formerly  of  the  University 
of  Petrograd,  now  of  the  University  of  Wiscon- 
sin, writes: 

"In  painting  the  dark  picture  of  Russia  in 
agony,  emphasis  is  usually  laid  upon  the  physical 
and  material  side  of  the  ruin  wrought  by  the  Bol- 
sheviki.  This  is  fearful  enough  in  all  conscience, 
millions  of  hapless  victims  paying  the  price 
through  executions,  starvation,  and  epidemic  dis- 
eases. But  more  terrible  and  irreparable  is  the 
destruction  of  the  cultural  and  moral  values. 

iBertrand  Russell,  Soviet  Russia— 1920,  "The  Nation,"  July  31, 
1920. 


DICTATORSHIP  OF  COMMUNIST  PARTY   231 

There  are  still  millions  of  workers  and  peasants 
to  build  up  again  the  material  prosperity  of  Rus- 
sia out  of  her  abundant  natural  resources,  once 
the  dead  hand  of  Bolshevism  has  been  removed, 
but  the  intellectual  and  moral  field  must  lie  fallow 
for  many  years."1 

Industrial  Reconstruction. — Notwithstanding 
all  the  ruin  that  has  been  wrought,  the  old  indus- 
trial system  has  not  been  entirely  destroyed,  and 
it  seems  to  be  repairing  and  reconstructing  itself, 
much  as  a  colony  of  ants  or  bees  repair  a  dam- 
aged hill  or  hive.  The  peasants  have  the  land, 
and  nationalization  exists  only  in  name.  Many 
manufacturing  industries  are  still  nationalized, 
but  they  are  conducted  largely  by  highly  paid 
experts,  under  the  old  system  of  factory  manage- 
ment, and  appear  to  be  drifting  back  toward  pri- 
vate ownership.  The  country  districts,  isolated 
from  the  cities,  and  reverting  to  medievalism, 
have  developed  the  old  "kustary"  or  cottage  in- 
dustries, and  local  trade,  and  with  them  a  new- 
old  middle  class  of  artisans. 

The  speculators  of  the  towns,  the  numerous 
officials,  the  army  officers,  the  technicians  and 
foremen  of  factories,  constitute  a  new  middle 
class  that  may  be  the  backbone  of  Russia's 
economic  reconstruction.  However,  this  "soviet 

iM.  I.  Rostovtsef,  The  Plight  of  the  Russian  Scholars,  "The 
Weekly  Review,"  April  20,  1921. 


232  DICTATORSHIP  OF  COMMUNIST  PARTY 

bourgeoisie"  is  menaced  by  the  laboring  class 
which,  as  Dr.  Paul  Rohrbach  says,  "is  over- 
whelmingly anti-Bolshevik."  Only  70,000,  or 
11  per  cent,  of  the  604,000  members  of  the  Com- 
munist Party  are  at  present  employed  as  work- 
men, the  rest  being  soldiers  or  officials  of  one 
kind  or  another.  Dr.  Rohrbach  says: 

"In  Moscow  there  are  hardly  100,000  workmen 
left,  but  there  are  230,000  Soviet  officials,  both 
male  and  female.  All  attempts  to  eliminate  ineffi- 
ciency, sabotage,  and  corruption  from  this  gigantic 
bureaucratic  apparatus  are  doomed  to  failure."  x 

Thus  the  Bolshevists,  in  their  fatuous  determi- 
nation to  carry  out  their  theories  to  the  logical 
consequences,  are  confronted  with  social  forces 
and  obstacles  which  they  can  neither  destroy  nor 
control,  and  in  conflict  with  which  they  are  likely 
to  suffer  shipwreck.  Professor  Zagorsky  sums 
up  the  situation  thus: 

"The  Soviet  authorities  set  as  their  aim  the 
immediate  realization  of  communism  in  Russia, 
but,  by  their  policy,  they  succeeded  only  in  cre- 
ating conditions  favorable  to  the  rebirth  of  capi- 
talism— primitive,  brutal  and  ruinous.  Wishing 
to  abolish  the  division  of  society  into  classes,  they 
provoked  class  antagonisms  such  as  Russia  had 
never  yet  seen.  Trying  to  stifle  the  capitalist  and 

iDr.  Paul  Rohrbach,  Germany  and  Eastern  Europe,  "The 
Weekly  Review,"  November  3,  1920. 


DlCTATOKSHIP  OF  COMMUNIST  PAKTY    233 

bourgeois  classes,  they  created  a  new  petty  bour- 
geoisie, equally  rapacious.  In  endeavoring  to 
suppress  private  property,  they  merely  succeeded 
in  developing,  in  all  grades  of  society,  property 
instincts  pushed  to  an  unheard-of  degree,  and, 
throughout  the  whole  social  economy,  an  unpre- 
cedented orgy  of  unbridled  egoism."  * 

Capitalism  Coming  Back. — The  soviet  govern- 
ment, evidently  recognizing  the  drift  toward 
capitalism,  and  unable  to  handle  the  industrial 
situation,  has  offered  concessions  to  foreign  capi- 
talists for  periods  running  from  20  to  80  years, 
including  a  tentative  concession  to  an  American 
syndicate  for  the  exploitation  of  fish,  furs,  coal, 
and  petroleum  in  Kamchatka,  a  great  forestry 
concession  to  an  English  syndicate,  and  another 
to  German  dye  manufacturers.  Also,  the  gov- 
ernment has  made  overtures  for  trade  with  for- 
eign countries,  as  in  the  recent  Russo-British 
agreement,  although  it  has  little  to  offer  in  ex- 
change but  gold,  as  there  is  practically  no  sur- 
plus of  wheat,  flax,  lumber,  or  other  raw  materi- 
als. And  as  the  gold  is  limited  in  quantity  there 
remains,  as  Krasin  has  said,  "only  the  granting 
of  concessions."  2 

Finally — and  this  is  another  long  step  back  to- 

iS.  Zagorsky,  Les  Aspects  Soriano?  de  la  R6publique  des  Soviets, 
'•'Le  Monde  Nouveau,"  Fevrier,  1921. 

2  Krasin  answers  Wells.  By  Fabian  Franklin,  "The  Weekly 
Review,"  June  18,  1921. 


234*    DlCTATOKSHIP  OF  COMMUNIST  PARTY 

ward  capitalism — the  Tenth  Congress  of  the 
Communist  Party,  which  met  at  Moscow  in  May, 
1921,  adopted  a  radical  change  of  policy  de- 
signed to  encourage  the  peasants  and  the  small 
capitalists.  The  peasants  are  to  pay  taxes  in 
kind  by  giving  the  state  about  one-third  of  the 
crop,  the  remaining  two-thirds  to  remain  at  the 
disposal  of  the  peasants  for  trading  through  the 
re-established  cooperative  societies.  The  govern- 
ment is  to  retain  control  of  transportation  and 
the  largest  industries,  but  small  and  middle-sized 
cooperatives  and  private  industries  are  to  be  per- 
mitted.1' 2 

The  Third  International. — Strangely  incon- 
sistent with  such  compromises  are  the  twenty-one 
conditions  of  admission  laid  down  by  the  Con- 
gress of  the  Third  International  held  in  Moscow 
in  August,  1920,  designed  to  separate  the  sheep 
from  the  goats  in  all  socialist  circles  throughout 
the  world.  Socialist  organizations  desiring  ad- 
mission to  the  International  Communist  Party 

i"The  Literary  Digest,"  June  18,  1921. 

2  This  decision  came  too  late  to  induce  the  peasants  to  raise 
larger  crops,  or,  indeed,  to  save  the  usual  amount  of  seed,  so  that 
the  acreage  planted  for  the  crop  of  1921  was  less  than  usual  and 
the  amount  of  seed  planted  per  desiatina  ( 2.7  acres )  was  less  than 
half  of  the  usual  amount.  So,  when  the  drought  came  in  the 
Volga  region,  there  were  but  slight  reserves  on  which  the  peasants 
could  live  until  another  season,  no  adequate  means  of  transpor- 
tation of  food  from  the  Ukraine  and  other  districts,  and  very 
little  seed  to  plant  for  the  harvest  of  1922.  The  responsibility  of 
the  Soviet  government  for  the  worst  results  of  the  frightful 
famine  of  1921  cannot  be  evaded.  (Cf.  Why  Russia  Starves,  by 
Leo  Pasvolsky,  "The  Weekly  Review,"  August  6,  1921.) 


DICTATORSHIP  OF  COMMUNIST  PARTY  235 

must  agree  to  have  only  tried  communists  as  lead- 
ers, to  purge  themselves  of  all  small-bourgeois 
elements,  to  carry  on  incessant  propaganda 
among  industrial  workers,  peasants,  trade  unions, 
cooperative  societies  and  the  like,  to  break  with 
reformism,  to  make  war  against  the  Amsterdam 
International,  to  assist  any  soviet  republic  fight- 
ing against  counter-revolution,  to  adopt  the  name 
"Communist  Party,"  and  to  submit  to  the  iron 
discipline  of  the  Communist  International.  In 
reading  such  outrageous  demands  one  cannot  but 
think  of  the  old  proverb : 

"Whom  the  gods  would  destroy  they  first  make  mad." 

Naturally,  these  iron  -  clad  demands  have 
caused  great  searchings  of  heart  among  socialists 
of  every  country,  as  all  true  communists  were 
called  to  come  out  from  among  their  "yellow" 
associates,  and  to  be  wholly  separate  and  sancti- 
fied to  the  great  cause. 

There  has  been,  therefore,  a  split  in  the  social- 
ist parties  of  practically  every  country,  the  "red" 
minority  usually  joining  the  Third  International, 
and  the  majority  of  the  "yellow"  variety  being 
left  to  the  tender  mercies  of  the  bourgeoisie.  In 
the  United  States,  for  example,  many  of  the  in- 
tellectuals and  revisionists,  as  Spargo,  Walling, 
Ghent  and  Russell,  had  already  left  the  Socialist 
Party  during  the  war,  but  now  most  of  the  others 


236  DICTATORSHIP  OF  COMMUNIST  PARTY 

of  that  belief,  including  Algernon  Lee,  James 
Oneal,  Meyer  London,  Victor  Berger  and  Mor- 
ris Hillquit,  refusing  to  bow  down  to  the  Moscow 
International,  are  excommunicated,  and  only  a 
remnant  of  comparatively  unlearned  agitators 
are  left  to  bear  the  standard. 

Bolshevism  Is  Revolutionary  Marocism. — But 
intellectuals  of  high  standing  such  as  these, 
among  whom  are  now  numbered  Plekhanoff  and 
Martoff  of  Russia,  Kautsky  and  Bernstein  of 
Germany,  and  even  Jean  Longuet  of  France, 
grandson  and  interpreter  of  Karl  Marx,  cannot 
approve  either  the  doctrines  or  the  tactics  of  the 
Russian  communists,  because  they  do  not  con- 
form to  the  evolutionary  views  of  the  later  Marx, 
and  do  not  rest  on  the  will  of  the  "immense  ma- 
jority" of  the  proletariat. 

Doubtless  the  revolutionism  of  the  Russian 
communists  is  theoretically  unsound  and  was 
repudiated  by  Marx  and  Engels  in  their  later 
years.  And  yet  these  communists  have  a  right 
to  claim  both  Marx  and  Engels  as  their  spiritual 
fathers,  because  they  follow  their  earlier,  if  not 
their  later,  teachings,  and  are  moving  in  the  di- 
rection indicated  by  them,  though  far  too  fast 
for  their  academic  comrades.  The  case  is  well 
stated  by  Vexler: 

"Between  Babeufs  Club  of  Equals  and 
Lenin's  Central  Committee  lies  a  world  of  dif- 


DICTATORSHIP  OF  COMMUNIST  PARTY  237 

f erence  and  a  century  of  history.  Yet  it  cannot 
be  gainsaid  that  an  unbroken  chain  of  revolution- 
ary tradition  links  the  conspiracy  of  1796  with 
the  coup  d'etat  of  1917.  From  Babeuf  to  Blan- 
qui,  from  Blanqui  to  Marx,  from  the  latter  to 
Lenin,  the  red  thread  of  the  social  revolution 
runs  unbroken  through  several  revolutionary 
organizations."  * 

Therefore  the  academic  socialists,  who  for 
more  than  a  century  have  tried  to  arouse  the  pro- 
letariat to  a  burning  sense  of  their  wrongs  and 
to  convince  them  that  capitalism  was  doomed  to 
destruction,  have  no  reason  to  be  surprised  or 
grieved  because  the  enraged  and  unleashed  pro- 
letariat, seeing  the  quarry  at  their  mercy,  have 
sprung  direct  at  its  throat. 

The  communists  will  doubtless  fail  in  their  pre- 
mature attack,  but  they  have  at  least  presented 
an  object  lesson  of  socialism  in  action  that  may 
save  the  world  from  like  experiments,  though  at 
terrible  cost  to  their  own  country  and  to  them- 
selves. And  the  academic  socialists,  whose  theo- 
retical position  is  no  less  unsound,  cannot  exon- 
erate themselves  by  saying  that  they  did  not  plan 
or  intend  the  event.  What  are  plans  and  speci- 
fications in  time  of  revolution? 

It  might  have  been  well  for  them  if  they  had 
pondered  the  wise  words  of  that  political  cynic, 

i  Feliciu  Vexler,  "Columbia  University  Quarterly,"  July,  1919. 


238  DICTATORSHIP  OF  COMMUNIST  PARTY 

Machiavelli:  "Let  no  man  who  begins  an  inno- 
vation in  a  state  expect  that  he  can  stop  at  his 
pleasure  or  regulate  it  according  to  his  inten- 
tion." 


APPENDIX 

THE   NONPARTISAN   LEAGUE 

By  way  of  indicating  the  historical  significance  of  the 
Nonpartisan  League,  founded  by  A.  C.  Townley  in  Feb- 
ruary, 1915,  it  should  be  noted  that  it  is  not  a  proletarian 
outbreak  such  as  Marxian  socialists  have  in  mind,  but  an 
expression  of  discontent  on  the  part  of  farmers,  especially 
those  of  the  western  or  poorer  districts  of  North  Dakota. 
As  such  it  is  an  agrarian  movement  related  to  the  Populist 
and  Free  Silver  agitation  of  the  'nineties  and  the  Granger 
movement  of  the  'seventies. 

The  National  Granges  directed  their  attacks  chiefly 
against  the  railroads,  which  they  desired  to  regulate;  the 
Populists  and  free-silver  advocates  favored  inflation  as  a 
means  of  maintaining  prices  and  paying  debts ;  and  in  this 
new  agrarian  movement  the  farmers,  believing  themselves 
cheated  by  commission  merchants,  millers,  bankers  and 
other  middlemen,  wish  to  do  their  own  marketing  by  cooper- 
ative effort,  or,  failing  that,  by  means  of  elevators,  mills, 
banks  and  other  agencies  owned  and  operated  by  the  state. 

Economic  conditions  do  not  account  for  everything,  yet 
they  may  partially  explain  why  the  Nonpartisan  League 
should  have  originated  in  North  Dakota  rather  than  in 
one  of  the  other  western  states.  According  to  the  latest 
census  (1920)  North  Dakota  has  a  population  of  646,872, 
of  whom  67  per  cent  live  on  the  farm,  19  per  cent  in 
villages  and  small  towns,  and  the  rest  in  towns  of  2,500 
inhabitants  or  over.  The  commercial  and  industrial  capital 
of  the  state,  therefore,  is  not  Fargo  with  its  22,000  in- 
habitants, nor  Grand  Forks  with  about  14,000,  nor  Bis- 
marck, the  seat  of  government,  with  barely  7,000,  but 
rather  the  twin  cities,  Minneapolis  and  St.  Paul,  the  only 

239 


240  APPENDIX 

great  urban  center  between  the  Great  Lakes  and  the 
Pacific  coast. 

Then,  too,  North  Dakota  is  still  largely  a  one-crop  state, 
producing  chiefly  small  grains,  of  which  spring  wheat  is 
by  far  the  most  important.  This  great  crop  is  mostly 
financed,  marketed  and  milled  in  Minneapolis,  St.  Paul, 
Duluth,  Milwaukee  and  Chicago,  and  it  is  not  strange 
that  the  farmers  of  North  Dakota  should  regard  the  mer- 
chants, manufacturers  and  bankers  of  these  cities  as  non- 
resident aliens. 

The  case  against  the  financial  interests  of  the  great 
cities,  including  New  York,  the  mother  of  them  all,  makes 
mention  of  speculation  in  land,  discrimination  in  railway 
rates,  increase  in  mortgages,  high  rates  of  interest,  growth 
of  tenancy,  and  other  forms  of  real  or  fancied  exploitation, 
but  the  chief  count  in  the  indictment  asserts  that  the 
farmers  do  not  receive  a  square  deal  in  the  marketing  of 
farm  products. 

As  to  the  marketing  of  spring  wheat,  relatively  little  is 
said  about  the  automatic  adjustment  of  prices  on  the 
Chicago  board  of  trade  and  similar  organizations,  although 
their  operations  are  a  mystery  to  outsiders,  who  for  that 
reason  suspect  the  insiders  of  manipulation,  gambling  and 
other  questionable  practices.  But  it  is  well  known,  though 
not  generally  admitted,  that  the  prices  paid  to  the  farmers 
fluctuate  with  those  of  the  central  markets,  and  that  the 
grain  dealers,  allowing  for  freight  charges  and  all  other 
expenses,  are  doing  business  on  a  narrow  margin.  The 
chief  complaint,  therefore,  is  that  the  grading  done  at  the 
private  elevators  is  unfair  and  that  competition  has  been 
largely  eliminated  in  the  buying  of  grain  by  the  conspiracy 
of  the  dealers  under  the  leadership  of  various  business 
men's  associations,  especially  the  Minneapolis  Chamber  of 
Commerce. 

In  a  recent  speech,  Senator  E.  F.  Ladd,  formerly  presi- 
dent of  the  North  Dakota  Agricultural  College,  said: 


APPENDIX  241 


"The  flagrant  injustice  of  allowing  the  grades  of  grain 
to  be  arbitrarily  fixed  by  the  buyer  is  best  evidenced  by 
the  fact  that  the  great  terminal  elevators  at  Minneapolis 
and  Duluth  habitually  sold  more  bushels  of  high  grade 
grain  than  their  records  show  that  they  had  purchased 
from  the  farmers.  Evidently  by  some  mysterious  hocus 
pocus  grain  became  enhanced  in  value  after  it  had  left  the 
farm  and  gone  into  the  hands  of  the  grain  buyers,  and,  of 
course,  this  manipulation  in  grades  cost  the  farmers  of 
North  Dakota  in  the  aggregate  many  millions  of  dollars 
every  year." 

In  reply  to  this  and  similar  statements  the  monthly  let- 
ter of  the  National  City  Bank  of  New  York  for  April, 
1921,  says: 

"In  our  opinion  it  is  incredible  that  the  Minneapolis 
Chamber  of  Commerce  has  countenanced  unfair  and  ir- 
regular methods.  It  is  quite  possible  that  there  may  have 
been  individual  members  of  the  grain  exchange  who  would 
not  be  above  sharp  practice,  but  that  the  exchange  as  a 
body  would  adopt  rules  of  practice  of  that  kind  is  un- 
believable." 

The  charge  is  based  upon  the  practice  of  mixing,  by 
which  a  certain  amount  of  grain  of  inferior  grade  may  be 
mixed  with  that  of  better  quality,  without  lowering  the 
grade  or  injuring  the  milling  value.  Moreover,  the  possi- 
bility of  doing  this  is  taken  into  account  in  fixing  the  price 
of  the  lower  grades,  so  that  the  farmer  may  gain  in  price 
part  or  all  of  what  he  loses  in  grade.  However,  this  ex- 
planation does  not  satisfy  the  farmers  of  North  Dakota. 

There  are  three  chief  lines  of  action  open  to  the  farmers 
of  North  Dakota  or  any  other  state  where  similar  problems 
present  themselves.  In  the  first  place,  they  might  do  their 
own  marketing  through  cooperative  associations  like  the 
California  Fruit  Growers'  Association,  which  have  been 
measurably  successful  in  holding  private  interests  in  check 
and  in  setting  standards  of  fair  market  conditions,  eveD 


242  APPENDIX 


when  they  have  gained  little  in  the  way  of  higher  prices. 

Secondly,  they  might  appeal  to  the  state  to  remove  the 
most  glaring  abuses  by  inspection  and  control  of  grading 
and  other  conditions  of  marketing,  thus  supplementing  the 
work  of  the  United  States  Bureau  of  Markets.  Or,  going 
farther  along  the  line  of  state  activity,  they  might  ask  for 
state  ownership  and  operation  of  elevators,  mills  and  other 
agencies  by  which  the  grain  growers  might  become  in- 
dependent of  private  enterprise  or  at  least  set  up  equitable 
standards  to  which  private  business  would  conform. 

In  the  third  place,  the  farmers  might  find,  after  careful 
study  of  marketing,  that  it  could  be  most  efficiently  carried 
on,  as  now,  by  private  enterprise,  and  that  the  business 
men's  organizations  would  cooperate  with  them  to  remove 
or  minimize  abuses  and  to  secure  the  greatest  possible 
benefit  to  all  concerned. 

The  first  of  these  methods  has  been  tried  in  North 
Dakota,  chiefly  by  the  Equity  Cooperative  Exchange, 
which  has  built  hundreds  of  elevators,  some  of  which  have 
been  quite  successful,  especially  during  the  time  of  rising 
prices.  However,  the  terminal  elevator  which  the  Equity 
Exchange  built  in  St.  Paul  lost  in  four  years  about  $75,000, 
and,  of  course,  the  financial  interests  of  Minnesota  were 
blamed  for  this. 

As  is  well  known,  farmers'  cooperative  associations  are 
hard  to  carry  on,  as  there  are  too  many  masters,  it  is  diffi- 
cult to  obtain  competent  managers,  and  not  easy  to  establish 
financial  connections.  Besides,  the  margin  of  profit  per 
bushel  of  grain  handled  is  not  so  large  as  is  commonly 
supposed  and,  in  general,  the  farmers  are  as  yet  lacking 
in  cooperative  experience. 

Evidently,  the  cooperative  elevators  of  North  Dakota 
were  not  altogether  satisfactory,  as  is  shown  by  the  clamor 
for  state  owned  elevators  which  arose  as  far  back  as  the 
year  1907.  In  the  election  of  November,  1912,  the  people 
ratified  a  constitutional  amendment  authorizing  the  state 


APPENDIX  243 

to  establish  a  state-owned  terminal  elevator,  but  the  legis- 
latures of  1913  and  1915  did  not  obey  the  mandate.  It 
might  have  been  well  if  the  farmers  had  been  allowed  to 
go  ahead  with  their  schemes,  if  only  that  they  might  have 
shown  the  relative  inefficiency  of  state  management  and 
have  been  dissuaded  from  trying  experiments  on  a  larger 
and  more  hazardous  scale. 

But  the  movement  grew  by  the  very  opposition  which 
it  engendered,  until  in  February,  1915,  Mr.  A.  C.  Townley, 
formerly  an  organizer  for  the  Socialist  Party,  conceived 
the  idea  of  creating  a  farmers'  league  which  should  control 
the  political  situation  and  thus  force  the  legislature  to 
comply  with  their  demands.  Thus  was  founded  the  Farm- 
ers' Nonpartisan  League  of  North  Dakota,  which  later 
developed  into  the  National  Nonpartisan  League,  and  has 
been  the  storm  center  of  politics  in  North  Dakota  and 
several  other  states  during  the  past  few  years. 

Through  the  efforts  of  Townley  and  his  corps  of  organ- 
izers, at  first  walking  from  farm  to  farm,  later  going  in 
Ford  automobiles,  the  League  spread  like  a  prairie  fire. 
Presently  it  obtained  control  of  the  Republican  Party,  and 
in  the  state  election  of  1916  it  elected  Lynn  J.  Frazier  as 
governor,  won  all  the  state  offices  except  that  of  state 
treasurer,  elected  81  of  the  113  members  of  the  lower 
house,  18  of  the  25  members  then  elected  to  the  senate, 
and  three  judges  of  the  supreme  court. 

The  League  could  not  do  much  in  the  way  of  legislation 
during  the  session  of  1917,  because  of  the  hold-over  sen- 
ators, but  during  the  ensuing  two  years  it  carried  on  a 
more  active  campaign  than  ever,  until  it  had  organizations 
in  13  states,  with  nearly  200,000  members  who  had  paid  $16 
apiece  for  their  two  years'  dues.  In  the  election  of  1918 
in  North  Dakota  they  obtained  control  of  both  houses, 
sent  three  of  their  members  to  Congress,  and  passed  amend- 
ments to  the  constitution  giving  the  legislature  large 
powers  in  the  carrying  on  of  industry  and  permitting 


244?  APPENDIX 

exemption  of  improvements  and  some  personal  property 
from  taxation.  The  total  vote  for  the  League  in  the 
states  where  it  was  active  was  about  600,000. 

The  program  of  the  League  pointed  strongly  in  the 
direction  of  state  socialism,  demanding  state  terminal 
elevators,  warehouses,  flour  mills,  pulp  and  paper  mills, 
stockyards,  packing  houses,  cold-storage  plants,  state  hail 
insurance,  rural  credit  banks.  Then,  too,  there  was  an 
additional  program  of  labor  legislation  designed  to  capture 
the  labor  vote. 

During  the  session  of  1919  the  Legislative  Assembly 
of  North  Dakota,  now  completely  controlled  by  the  League, 
passed  laws  for  the  creation  of  a  state  bank,  state  mills 
and  elevators,  a  system  of  state  grading,  a  state  home  build- 
ing association,  state  insurance,  and  other  measures  for 
the  benefit  of  the  farmers  first  of  all.  The  Assembly  also 
passed  a  series  of  labor  laws,  including  disability  com- 
pensation, eight-hour  day  for  women,  minimum  wage  for 
women,  limiting  the  issuance  of  injunctions  in  labor  dis- 
putes, requiring  the  union  label  on  state  printing.  For 
the  administration  of  the  state  industrial  enterprises  an 
Industrial  Commission  was  created,  consisting  of  the 
Governor,  the  Attorney-General,  and  the  Commissioner  of 
Agriculture  and  Labor. 

The  inauguration  of  so  considerable  a  program  of  state 
enterprise  required  a  considerable  sum  of  money,  so  an 
issue  of  bonds  up  to  a  limit  of  $17,000,000  was  authorized 
by  the  Assembly.  The  legality  of  the  entire  program  in- 
cluding the  validity  of  the  bonds,  was  soon  attacked  in  the 
courts,  but  a  favorable  decision  was  rendered  by  the  United 
States  Supreme  Court  on  June  1,  1920. 

Toward  the  end  of  the  year  an  issue  of  $6,200,000  in 
bonds,  bearing  interest  from  5  to  5%  per  cent  was  offered 
for  sale,  but  could  not  be  floated  at  the  time.  Friends  of 
the  League  accuse  the  financial  interests  of  conspiring  to 
discredit  the  bonds  and  of  demanding  that  NQ?th  Dakota 


APPENDIX  245 

abandon  part  of  its  industrial  program  as  the  price  of  their 
assistance.  The  banks,  on  the  other  hand,  say  that  the 
bonds  are  not  attractive  to  investors,  as  the  financial  affairs 
of  North  Dakota  have  been  badly  managed,  and  as  the 
bond  market  in  general  has  been  much  depressed.  Failing 
to  sell  the  bonds  in  the  usual  way,  the  Bank  of  North 
Dakota  has  recently  offered  them  to  popular  subscription. 
Lacking  funds  from  this  source,  and  eager  to  begin  the 
various  enterprises,  the  Industrial  Commission  took  ad- 
vantage of  section  7  of  the  Act  creating  the  Bank,  which 
required  all  state,  county,  townsfcip,  municipality  and 
school  district  funds,  with  the  funds  of  all  penal,  educa- 
tional and  industrial  institutions  of  the  state,  and  all  other 
public  funds,  to  be  deposited  in  the  bank. 

On  the  basis  of  these  deposits  the  Bank  made  large 
advances  to  the  industrial  enterprises.  The  Mill  and 
Elevator  Association,  organized  May  29,  1919,  purchased 
a  small  experimental  flour  mill  at  Drake,  which  it  operated 
at  some  loss  because  of  falling  prices,  which  could  not  be 
legally  evaded  by  the  usual  "hedging."  On  May  5,  1920, 
the  Association  began  the  construction  of  a  large  mill  at 
Grand  Forks  to  cost  about  $2,000,000,  but  the  work  was 
suspended  later  in  the  year  for  lack  of  funds.  The  Home 
Building  Association  began  operations  in  the  summer  of 
1919,  since  when  31  homes  have  been  completed  and  27 
are  in  course  of  construction;  but  this  work  also  has  been 
suspended. 

The  Bank  also  lent  nearly  $3,000,000  in  over  600  farm 
loans,  running  for  30  years.  Then,  too,  it  deposited  about 
the  same  amount  in  some  470  local  banks,  some  of  which 
were  specially  favored.  The  deposits  in  the  Scandinavian 
American  Bank  of  Fargo,  now  closed,  in  which  League 
members  are  said  to  have  been  largely  interested,  amounted 
to  $444,127,  and  the  deposits  in  other  closed  banks 
amounted  to  about  $500,000  more.  In  these  and  other 
ways  nearly  $5,000,000  of  the  Bank's  resources  were,  tied 


246  APPENDIX 


up  in  non-liquid  or  "frozen"  credits  and  were  not  available 
to  meet  the  demands  of  the  local  governing  bodies  and 
other  custodians  of  public  funds. 

The  troubles  of  the  Bank  were  not  wholly  due  to  bad 
banking,  but  in  part  to  a  change  in  public  opinion,  which 
after  a  time  set  strongly  against  the  League.  In  No- 
vember, 1916,  Governor  Frazier  was  elected  by  a  majority 
of  67,000;  in  1918  his  majority  was  reduced  to  15,000; 
and  in  1920  it  was  only  4,700,  although  in  that  election 
women  were  first  allowed  to  vote.  At  that  time,  too,  the 
League  lost  control  of  the  House,  holding  the  Senate  by 
a  small  majority.  To  cap  the  climax,  two  important 
measures  were  adopted  by  referendum  vote,  the  one  con- 
fining the  activities  of  the  Bank  to  rural  credits,  thus 
preventing  the  financing  of  the  industrial  projects,  the 
other  repealing  the  aforementioned  section  7  which  required 
the  political  subdivisions  to  deposit  their  funds  with  the 
Bank. 

Soon  after  this  37  out  of  51  county  treasurers  demanded 
their  funds,  and  presently  other  custodians  of  public  moneys, 
followed  suit,  thus  creating  a  serious  run  on  the  Bank, 
as  the  deposits  were  large.  Thereupon  the  Bank  had  to 
call  in  deposits  from  the  local  banks,  creating  a  crisis  which 
was  only  partially  relieved  by  the  redeposit  of  these  funds 
by  their  custodians  in  the  same  or  other  local  banks.  The 
situation  was  decidedly  embarrassing,  especially  in  view 
of  the  general  financial  stringency.  Some  35  of  the  local 
banks  closed  their  doors,  including  the  Scandinavian 
American  Bank,  and  the  Bank  of  North  Dakota  itself 
could  not  pay  all  its  depositors.  The  Bank  is  doubtless 
solvent  enough,  as  it  has  the  credit  of  the  state  back  of  it, 
but  it  will  take  a  long  time  to  liquidate,  and  meanwhile 
the  taxpayers  will  have  to  pay.  Altogether,  North  Dako- 
ta's experience  of  state  banking,  coupled  with  state  in- 
dustrial enterprise,  has  not  been  happy. 

As  to  the  success  or  failure  of  the  industrial  enterprises, 


APPENDIX  247 


nothing  final  can  be  said,  as  most  of  the  projects  have 
been  discontinued  for  lack  of  funds  and  will  not  be  resumed 
until  the  bonds  are  sold  or  the  taxpayers  advance  the 
money,  which  they  will  hardly  do.  It  is  said  that  the  state 
is  unable  to  pay  hail  losses  amounting  to  some  $800,000. 
Already  taxes  are  more  than  twice  what  they  were  before 
the  war,  and  the  prospect  of  increasing  burdens  on  the 
farmers  in  these  hard  times  must  be  decidedly  unpleasant. 
However,  Senator  Ladd  is  very  hopeful,  for  he  says: 

"The  State  mill  (at  Drake),  although  it  has  been  run 
on  an  experimental  scale,  has  demonstrated  that  huge  sav- 
ings can  be  effected  in  the  marketing,  manufacture,  and 
distribution  of  North  Dakota's  wheat  crop  when  the  state 
enters  into  business  on  a  large  scale.  If  the  entire  wheat 
crop  of  North  Dakota  can  be  handled  by  the  state  and 
manufactured  into  flour,  the  annual  saving  to  the  produc- 
ers and  consumers  of  the  state  would  not  be  less  than 
$60,000,000." 

Extravagant  statements  such  as  this,  which  abound  in 
the  Nonpartisan  Leader  and  other  publications  of  the 
League,  read  like  the  prospectuses  of  certain  mining  com- 
panies, and  must  be  largely  discounted  by  the  taxpayers 
of  North  Dakota  if  they  would  not  plunge  into  financial 
waters  beyond  their  depth.  Up  to  the  present  time  they 
have  got  nothing  but  increasing  taxes,  glowing  promises, 
and  some  experience  of  the  ways  of  government  in  the 
initiation  and  conduct  of  industrial  enterprises.  Possibly, 
however,  they  may  take  comfort  in  the  thought  that  North 
Dakota  has  been  a  pioneer  in  this  line  of  activity  and  that 
her  sister  states  may  profit  by  her  mistakes. 

The  experience  of  North  Dakota  is  of  little  value  except 
in  a  negative  way;  but  that  of  New  Zealand,  continued 
through  more  than  25  years,  has  some  bearing  upon  the 
problem  involved.  In  that  country  in  the  early  'nineties, 
the  Liberal  Party,  consisting  largely  of  small  farmers  and 
shopkeepers,  made  an  alliance  with  the  labor  unions  for 


248  APPENDIX 

their  mutual  benefit,  and  in  the  years  that  followed  they 
put  through  a  double-barreled  program  of  legislation  de- 
signed to  break  the  power  of  the  great  landowners  and 
capitalists. 

On  the  one  hand  were  laws  designed  to  break  up  the 
great  estates,  whether  by  direct  purchase  or  by  special 
taxation  of  large  holdings  and  the  property  of  absentees. 
There  were  government  advances  to  settlers,  and  other 
favors  to  the  small  farmers.  On  the  other  hand,  a  long 
series  of  labor  laws  were  passed,  including  the  employers' 
liability  amendment  act,  the  industrial  conciliation  and 
arbitration  act,  the  seamen's  act,  acts  providing  for  old- 
age  pensions,  workers'  dwellings,  advances  to  workers  and 
the  like.  Also,  the  government,  which  already  owned  and 
operated  the  railroads,  acquired  a  few  coal  mines,  went 
into  the  fire,  life  and  accident  insurance  business,  and 
carried  on  some  other  activities  pointing  in  the  direction  of 
state  socialism. 

The  experience  of  New  Zealand  shows  clearly  that  a 
country  may  move  in  a  given  direction  for  a  time  without 
approaching  the  apparent  goal.  Certainly,  the  agrarian 
legislation  of  New  Zealand,  while  ostensibly  socialistic, 
was  really  the  very  opposite  of  that,  as  it  increased  the 
number  of  small  farmers  and  strengthened  their  attach- 
ment to  the  institution  of  private  property.  So  also  the 
"socialistic"  labor  legislation,  in  so  far  as  it  was  beneficial 
to  the  laborers,  tended  to  make  them  less  discontented  and 
more  loyal  to  the  present  social  order. 

However — and  this  is  an  interesting  phase  of  the  class 
struggle — the  "Lib-Lab  Party"  continued  for  a  time,  but 
as  the  farmers  became  more  prosperous  and  the  laborers 
demanded  more  and  more,  including  further  taxation  of 
land  values,  the  alliance  weakened,  and  finally  broke  up, 
the  farmers  foregathering  with  conservatives,  while  the 
more  radical  of  the  laborers  drifted  toward  socialism. 

Another  interesting  phase  of  state  activity  in  New  £ea- 


APPENDIX  249 

land  is  the  fact  that  it  has  built  up  a  large  and  influential 
civil  service  or  bureaucracy,  which  is  a  source  of  political 
strength  to  the  party  in  power,  giving  opportunity  to 
political  leaders  to  build  up  an  impregnable  machine. 
Indeed,  the  long  life  of  the  "Lib-Lab  Party,"  from  1891 
to  1912,  was  probably  due  in  part  to  the  tremendous  pow- 
er wielded  by  the  Ministry,  which  made  it  advantageous 
to  civil  servants,  merchants,  manufacturers,  contractors, 
banks,  newspapers,  counties,  municipalities,  and  even 
farmers,  to  "stand  in"  with  the  government.  The  fact 
that  this  kind  of  corruption  has  not  gone  further  in  New 
Zealand  is  a  testimony  to  the  generally  high  standards  of 
public  morality  in  that  country. 

As  to  the  general  financial  success  of  the  industrial  en- 
terprises in  New  Zealand,  the  most  that  can  be  said  is  that 
they  have  not  ruined  the  country,  although  some  of  them 
have  resulted  in  deficits  which  have  been  made  up  out  of 
taxes  and  loans.  It  should  be  noted,  too,  that  New  Zealand 
has  done  little  in  the  way  of  "socialistic"  legislation  during 
the  past  fifteen  years,  and  that  there  is  at  present  little 
evidence  to  show  that  capitalism  in  that  country  is  break- 
ing down. 

Viewing  the  experiments  of  North  Dakota  in  the  light 
of  those  of  New  Zealand,  and  in  their  relation  to  "scientific" 
socialism,  it  is  evident  that  the  farmers  of  North  Dakota 
as  a  class  are  not  socialists,  and  that  if  they  succeed  in 
solving  the  marketing  problem,  whether  by  state  activity 
or  cooperative  effort,  or  merely  by  regulating  private  en- 
terprise, they  will  be  better  satisfied  than  ever  with  the 
private  ownership  of  land  and  other  property.  Moreover, 
as  everybody  knows,  the  farmers  are  the  bulwark  of 
capitalism,  and  anything  that  will  make  them  prosperous 
and  happy  will  strengthen  the  foundations  of  the  present 
social  order. 

By  the  same  token,  orthodox  socialists,  wishing  industrial 
conditions  to  grow  worse  and  worse,  scoff  at  all  such  ex- 


250  APPENDIX 


periments  in  "state  socialism"  or  "state  capitalism"  as 
have  been  tried  in  New  Zealand  and  North  Dakota.  Some 
of  them  have  attacked  the  Nonpartisan  League  and  are 
glad  to  see  it  fail,  because  they  wish  to  have  it  clearly 
shown  that  social  salvation  can  come  through  the  prole- 
tariat alone.  But  the  farmers  of  North  Dakota  are  not 
proletarians  and  have  no  wish  to  become  such;  wherefor, 
from  the  point  of  view  of  the  evolutionary  Marxists,  and 
certainly  from  that  of  the  Moscow  International,  they  are 
but  henchmen  of  the  bourgeoisie. 

For  all  that,  there  have  been  and  are  a  number  of  social- 
ists of  various  shades  of  red  or  pink  among  the  leaders 
of  the  Nonpartisan  League,  for  soon  after  the  movement 
had  well  begun  a  number  of  carpet-bag  socialists  came 
from  far  and  near,  even  as  the  Bolshevists  and  others  of 
that  belief  gathered  in  Petrograd  after  the  March  Revo- 
lution. 

A.  C.  Townley  himself  was  an  organizer  for  the  Social- 
ist Party  and  ran  for  the  legislature  of  North  Dakota  on 
the  Socialist  ticket  in  November,  1914.  The  well-known 
socialist  author  and  journalist  Charles  Edward  Russell 
helped  to  launch  the  Nonpartisan  Leader,  wrote  a  series 
of  appreciative  articles  for  Pearson's  Magazine,  also  a 
book,  and  was  for  some  months  a  valued  advisor  of  the 
League. 

Arthur  Le  Sueur,  a  socialist  of  long  standing,  a  friend 
and  associate  of  Mr.  Debs,  and  a  member  of  the  executive 
committee  of  the  Socialist  Party,  was  one  of  the  leading 
lights  of  the  League.  Another  was  Walter  Thomas  Mills, 
a  peripatetic  author  and  orator,  once  of  Milwaukee,  later 
of  California,  still  later  a  socialist  agitator  and  organizer 
in  New  Zealand.  Still  another  was  D.  C.  Coates,  sometime 
lieutenant-governor  of  Colorado,  one  of  the  organizers  of 
the  I.  W.  W.  in  Chicago  in  the  year  1905,  la-ter  a  prominent 
socialist  in  Spokane,  Washington.  Besides  these  were 
minor  socialist  lights,  such  as  A.  E.  Bowen,  Joseph  Gilbert, 


APPENDIX  251 

Richard  Grace,  L.  L.  Randall,  Alex  Strom,  O.  M.  Thoma- 
son,  J.  Arthur  Williams,  F.  B.  Wood,  Howard  Wood  and 
others. 

The  presence  of  these  men,  of  a  type  not  indigenous  in 
North  Dakota,  shows  that  the  League  did  not  exist  merely 
for  the  solving  of  the  marketing  problem,  but  that  a  strong 
group  of  professed  socialists  were  directing  it  toward 
ulterior  ends.  They  were  wise  enough  to  keep  in  the  back- 
ground and  to  put  mostly  non-socialists  into  public  office, 
but  what  took  place  on  the  stage  can  be  fully  understood 
only  by  finding  out  what  went  on  behind  the  scenes. 

In  the  corresponding  movement  in  New  Zealand,  on  the 
contrary,  few,  if  any,  out-and-out  socialists  were  concerned, 
and  such  radical  legislation  as  was  passed  was  directed 
toward  immediate  ends.  Also,  in  New  Zealand  more  care 
was  taken  to  put  competent  men  in  charge  of  the  various 
public  enterprises  and  to  keep  them  free  from  political 
interference. 

In  fact,  the  political  organization  of  North  Dakota,  as 
of  all  the  other  states  of  the  Union,  is  not  well  suited  to 
the  carrying  on  of  state  industries,  and  must  be  consid- 
erably changed  before  it  can  operate  them  with  any  measure 
of  success.  Probably  it  will  be  necessary  to  have  some- 
thing like  the  cabinet  system  obtaining  in  the  United  King- 
dom and  the  British  dominions,  or  the  more  highly 
organized,  though  less  elastic  bureaucracy  of  continental 
Europe.  To  plunge  blindly  into  a  number  of  industrial 
activities,  as  North  Dakota  did,  without  the  necessary 
changes  in  governmental  organization,  with  insufficient  poli- 
tical training,  with  practically  no  business  experience,  and 
with  insufficient  funds,  was  to  invite  disaster. 

The  League  itself,  with  its  highly  centralized  organiza- 
tion, was  for  a  time  the  real  government  of  North  Dakota, 
a  government  within  a  government,  or,  rather,  the  power 
behind  the  throne,  and,  as  such,  was  open  to  all  the  ob- 
jections commonly  urged  against  Tammany  and  other 


252  APPENDIX 


political  machines.  And  inasmuch  as  a  number  of  the  most 
prominent  leaders,  as  socialists  and  adventurers,  were  in 
no  sense  representatives  of  the  farmers  of  North  Dakota, 
the  dictatorship  of  the  League  was  all  the  more  objec- 
tionable. 

At  the  present  time  it  looks  as  though  the  methods,  if 
not  the  aims,  of  the  Nonpartisan  League  of  North  Dakota 
were  pretty  well  discredited,  as  premature  efforts  to  solve 
the  marketing  problem  by  state  enterprise  on  too  large  a 
scale.  The  revised  program  of  the  League  in  other  states 
appears  to  favor  state  ownership  of  elevators,  mills,  pack- 
ing companies,  and  the  like,  "in  so  far  as  necessary  to 
restore  competition  and  break  monopoly  power." 

Meanwhile,  there  has  been  a  revival  of  interest  in 
cooperative  marketing,  as  exemplified  in  the  work  of  the 
Farmers'  Educational  Cooperative  Union,  and  in  the  recent 
organization  of  the  United  States  Grain  Growers,  Inc., 
which  is  to  coordinate  the  work  of  many  of  the  other 
cooperative  associations,  to  carry  on  the  marketing  of 
grain  and  to  manage  other  operations  on  a  very  large  scale. 
The  prospectus  calls  it  "A  farmer-owned,  non-stock,  non- 
profit association  to  handle  and  sell  grain  at  cost  for  its 
farmer  members,  designed  to  stabilize  market  prices, 
eliminate  speculation  and  manipulation,  and  furnish  ade- 
quate credit  to  farmers." 

Clearly,  the  revolt  of  the  farmers  against  the  abuses, 
real  and  imaginary,  of  the  present  marketing  system  is 
not  a  revolutionary  movement  directed  against  the  founda- 
tions of  the  present  social  order,  of  which  the  farmers  have 
always  been  staunch  supporters.  Doubtless,  the  farmers 
of  North  Dakota  will  presently  get  rid  of  the  vagrant 
socialists  who  have  so  badly  muddled  and  discredited  the 
movement  with  their  vague  theories  and  their  woful  lack 
of  business  experience.  After  that  the  movement  will 
doubtless  continue  in  a  saner  and  more  businesslike  way. 


SELECTED  LIST  OF  BOOKS  IN 
ENGLISH 

GENERAL   AND    HISTORICAL 

Barker,  J.   Ellis.     British   Socialism.     1908.     Scribner. 

Beer,  M.  A  History  of  British  Socialism.  2  vols.  1919. 
Bell  (London). 

Bliss,  New  Encyclopedia  of  Social  Reform.  1908.  Funk 
and  Wagnalls. 

Cross,  Ira  B.     Essentials  of  Socialism.     1912.     Macmillan. 

Ely,  R.  T.    Socialism  and  Social  Reform.     1895.     Crowell. 

Ensor,  R.  C.  K.  (editor).  Modern  Socialism.  1907.  Scrib- 
ner. 

Guthrie,  William  B.  Socialism  Before  the  French  Revolu- 
tion. 1907.  Macmillan. 

Hillquit,  Morris.  History  of  Socialism  in  the  United 
States.  1910.  Funk  and  Wagnalls. 

Hughan,  Jessie  W.  American  Socialism  of  the  Present 
Day.  1911.  Lane. 

Kirkup,  Thomas,  and  Pease,  Edward.  History  of  Social- 
ism. 1914.  Macmillan. 

Laidler,  Harry  W.  Socialism  in  Thought  and  Action. 
1920.  Macmillan. 

Mavor,  James.  An  Economic  History  of  Russia.  2  vols. 
1914.  Dutton. 

Menger,  Anton.  The  Right  to  the  Whole  Produce  of 
Labor.  1899.  Macmillan. 

Russell,  Bertrand.  Proposed  Roads  to  Freedom.  1919. 
Holt. 

Shaffle,  A.  The  Quintessence  of  Socialism.  1880.  Scribner. 

253 


254*    SELECTED  LIST  OF  BOOKS  IN  ENGLISH 

Seligman,    E.    R.    A.      The    Economic    Interpretation    of 

History.      1902.     Columbia  University. 
Spargo,   John,   and   Arner,   George   B.    L.      Elements    of 

Socialism.     1912.     Macmillan. 

Spargo,  John.     Socialism:  a  Summary.     1918.     Macmillan. 
Stoddart,  J.  T.    The  New  Socialism :  an  Impartial  Inquiry. 

1909.      Hodder   &   Stoughton    (London). 
Walling,  William  E.   Socialism  as  It  Is.    1912.   Macmillan. 
Walling,    Stokes,    Hughan    and    Laidler    (editors).      The 

Socialism  of  Today.     1916.     Holt. 
Vandervelde,  Emil.    The  State  vs.  Socialism.     1919.    Kerr. 

EXPOSITION  OF  SCIENTIFIC  SOCIALISM 

Boudin,    Louis    B.      Theoretical    System    of    Karl    Marx. 

1907.     Kerr. 
DeLeon,    Daniel.      Socialist    Reconstruction    of    Society. 

1918.    N.  Y.  Labor  News  Co. 
Engels,    Frederick.      Socialism,    Utopian    and    Scientific. 

1892.     Kerr. 

Fabian  Essays.     1913.     Ball  Publishing  Co.  (Boston). 
Fraina,  Louis  C.     Revolutionary  Socialism.     1918.     Com- 
munist Press. 
Hillquit,  Morris.    Socialism  in  Theory  and  Practice.     1909. 

Macmillan. 
Hyndman,  H.  M.     Evolution  of  Revolution.     1921.     Boni 

&  Liveright. 

Kautsky,  Karl.     The  Class  Struggle.     1892.     Kerr. 
Kautsky,  Karl.     Social  Revolution.     1902.     Kerr. 
Marx,  Karl.     Capital.     (3  vols.)     vol.  I,   1867;  vol.   II, 

1885;  vol.  Ill,  1894.     Kerr. 
Marx,    Karl,    and    Engels,    Frederick.      The    Communist 

Manifesto.     1848.     Kerr. 
Plekhanoff,    George.      Anarchism    and    Socialism.      1912. 

Kerr. 


SELECTED  LIST  OF  BOOKS  IN  ENGLISH    255 

Rodbertus,    Karl.       Overproduction    and    Crises.       1898. 

Swan  Sonnenschein   (London). 

Simons,  A.  M.     Class  Struggle  in  America.     1909.     Kerr. 
Untermann,  Ernest.     Marxian  Economics.     1911.     Kerr. 

CRITICISM  BY   REVISIONISTS  AND   ANTI- 
SOCIALISTS 

Bernstein,  Eduard.  Evolutionary  Socialism.  1909. 
Huebsch. 

Bohm-Bawerk,  Eugen  von.  Karl  Marx  and  the  Close  of 
His  System.  1898.  Fisher  Unwin  (London). 

Boucke,  O.  F.     Limits  of  Socialism.     1920.     Macmillan. 

Cathrein,  Victor.  Socialism:  its  critical  basis.  1904. 
Benziger  (New  York). 

Croce,  Benedetto.  Historical  Materialism.  1914.  Mac- 
millan. 

Day,  Henry  C.  Catholic  Democracy.  1914.  Heath, 
Cranton  &  Ouseley  (London). 

Flint,  Robert.     Socialism.      1894.     Ibiston   (London). 

Guyot,  Yves.     Socialistic  Fallacies.     1910.     Macmillan. 

Hillquit,  Morris,  and  Ryan,  John  A.  Socialism:  Promise 
or  Menace?  1914.  Macmillan. 

Hirsch,  Max.  Democracy  vs.  Socialism.  1901.  Mac- 
millan. 

Jaures,  Jean.     Studies  in  Socialism.     1906.     Putnam. 

Leroy-Beaulieu,  Paul.  Collectivism.  1908.  John  Murray 
(London). 

Mallock,  W.  H.  A  Critical  Examination  of  Socialism. 
1912.  John  Murray  (London). 

Mallock,  W.  H.  Social  Reform.  1914.  John  Murray 
(London). 

Nitti,  F.  S.     Catholic  Socialism.     1895.     Macmillan. 

Robinson,  Cyril  E.  New  Fallacies  of  Midas.  1919. 
McBride. 

Shaffle,  A.  Impossibility  of  Social  Democracy.  1892. 
Scribner. 


256    SELECTED  LIST  OF  BOOKS  IN  ENGLISH 

Simkhovitch,  V.  G.  Marxism  versus  Socialism.  1913. 
Holt. 

Skelton,  O.  D.  Socialism,  a  Critical  Analysis.  1911. 
Houghton  Mifflin. 

Sombart,  Werner.  Socialism  and  the  Social  Movement. 
1909.  Button. 

Spargo,  John.  Karl  Marx:  His  Life  and  Work.  1910. 
Huebsch. 

Towler,  W.  G.,  and  Ray,  W.  Socialism:  Its  Promise  and 
Failure.  1920.  King  (London). 

Tugan-Baranowsky,  M.  Modern  Socialism.  1910.  Allen 
(London). 

de  Tunzelmann,  G.  W.  The  Superstition  Called  Socialism. 
1911.  Allen  (London). 

Vaughan,  Bernard.  Socialism  from  the  Christian  Stand- 
point. 1912.  Macmillan. 

Veblen,  Thorstein.  Place  of  Science  in  Modern  Civiliza- 
tion. 1919.  Huebsch. 

Withers,  Hartley.  The  Case  for  Capitalism.  1920. 
Button. 

SYNBICALISM  ANB  THE  I.  W.  W. 

Brissenden,  Paul  F.     The  I.  W.  W:  A  Study  of  American 

Syndicalism.     1919.     Longmans. 
Brooks,  John  G.     American  Syndicalism:     The  I.  W.  W. 

1919.     Macmillan. 
Clay,  Sir  Arthur.     Syndicalism  and  Labour.     1911.     John 

Murray    (  London) . 
Estey,   J.   A.      Revolutionary  Syndicalism.      1913.      King 

(London). 

Levine,  Louis.    Syndicalism  in  France.     1914.     Longmans. 
Lewis,  A.  B.     Syndicalism  and  the  General  Strike.     1912. 

Unwin   (London). 
Macdonald,  J.  Ramsay.     Syndicalism.     1912.     Conctable 

(London). 


SELECTED  LIST  OF  BOOKS  IN  ENGLISH    257 

Scott,    J.    W.      Syndicalism    and    Philosophical    Realism. 

1919.     Black   (London). 
Snowden,    Philip.       Socialism    and    Syndicalism.       1913. 

Collins   (London). 
Spargo,    John.       Syndicalism,    Industrial    Unionism    and 

Socialism.     1913.     Huebsch. 

GUILD  SOCIALISM 

Cole,    G.    D.    H.      Labor    in   the    Commonwealth.      1919. 

Huebsch. 
Cole,  G.  D.  H.    Guild  Socialism  Restated.    1920.    Parsons. 

(London). 

Cole,  G.  D.  H.     Social  Theory.     1920.     Stokes. 
Cole,   G.    D.    H.      Self   Government   in    Industry.      1920. 

Bell  (London). 

Douglas,  C.  H.  Economic  Democracy.  1920.  Harcourt. 
Hobson,  S.  G.  National  Guilds.  1919.  Bell  (London). 
Hobson,  S.  G.  National  Guilds  and  the  State.  1919. 

Macmillan. 

Penty,  A.  J.     Old  Worlds  for  New.     1917.     Bell. 
Penty,  A.  J.     Guilds  and  the  Social  Crisis.     1919.     Allen 

&  Unwin  (London). 
Reckitt,  Maurice  B.,  and  Bechofer,  C.  E.     The  Meaning 

of  National  Guilds.     1918.     Macmillan. 
Taylor,  G.  R.  S.     Guild  State:     Its  Principles  and  Possi- 
bilities.    1919.     Macmillan. 
Webb,  Sidney  and  Beatrice.     Constitution  for  the  Socialist 

Commonwealth  of  Great  Britain.     1920.     Longmans. 

BOLSHEVISM 

Aubonelli,  Etienne.    Bolshevik  Russia.     1920.     Knopf. 

Brailsford,  H.  N.  The  Russian  Workers'  Republic.  1921. 
Harpers. 

Bullard,  Arthur.  The  Russian  Pendulum.  1919.  Mac- 
millan. 


258    SELECTED  LIST  OF  BOOKS  IN  ENGLISH 

Hillquit,  Morris.  From  Marx  to  Lenin.  1921.  The  Han- 
ford  Press. 

Kautsky,  Karl.  Dictatorship  of  the  Proletariat.  1921. 
Appeal  to  Reason,  Girard,  Kansas. 

Lenin,  N.  Soviets  at  Work.     1919.     Rand  School. 

Lenin,  N.  The  State  and  Revolution.  1917.  Allen  & 
Unwin  (London). 

Lenin,  N.,  and  Trotzky,  L.  Proletarian  Revolution  in 
Russia.  1918.  Communist  Press. 

Miliukov,  Paul.     Bolshevism:     An  International  Danger. 

1920.  Scribner. 

Olgin,  M.  J.     The  Soul  of  the  Russian  Revolution.     1917. 

Holt. 
Pasvolsky,  Leo.     The  Economics  of  Communism.      1921. 

Macmillan. 
Paul,    Eden    and    Cedar.      Creative    Revolution.       1920. 

Allen  &  Unwin   (London). 
Ross,    Edward   A.      The    Russian    Bolshevik    Revolution. 

1921.  Century. 

Russell,  Bertrand.     Bolshevik  Theory.     1921.     Harcourt. 
Sack,   A.    J.      Birth    of   the    Russian    Democracy.      1918. 

Russian  Information  Bureau. 
Spargo,  John.     Bolshevism.     1919.     Harpers. 
Spargo,  John.    The  Greatest  Failure  in  all  History.    1920. 

Harpers. 

Trotzky,  Leon.     Our  Revolution.     1918.     Holt. 
Trotzky,  Leon.     The  Bolsheviki  and  World  Peace.     1918. 

Boni  &  Liveright. 

Walling,  W.  E.     Sovietism.     1920.     Dutton. 
Wells,  H.  G.     Russia  in  the  Shadows.     1921.     Doran. 
Williams,  A.  R.     Lenin,  the  Man  and  His  Work.     1919. 

Scott  &  Seltzer. 
Wilcox,  E,  H.    Russia's  Ruin.     1919.     Scribner. 


SELECTED  LIST  or  BOOKS  IN  ENGLISH    259 


THE  NONPARTISAN  LEAGUE 

Bruce,  A.  A.    The  Nonpartisan  League.    1921.    Macmillan. 

Gaston,  Herbert  E.  The  Nonpartisan  League.  1920. 
Harcourt. 

Langer,  William.  The  Nonpartisan  League.  1920.  Man- 
dan,  N.  D.  Farmers'  Press. 

Russell,  Charles  E.  The  Story  of  the  Nonpartisan  League. 
1920.  Harpers. 

BIBLIOGRAPHIES 

Zimand,  Savel.  Modern  Social  Movements,  Descriptive 
Summaries  and  Bibliographies.  1921. 

Other  good  bibliographies  are  contained  in  the  works  of 
Skelton,  Cross  and  Laidler. 


INDEX 


Academic  Socialists,  237 

Adams  and  Sumner,  95 

Adams,  E.  F.,  on  social  saving, 
121 

Agricultural  statistics,  Ger- 
many and  America,  164;  at 
variance  with  socialistic  pre- 
diction, 164,  165 

Agriculture,  163;  statistics  of, 
164,  175;  New  Zealand  legis- 
lation, 176,  247;  in  Russia, 
222,  223 

Alsberg,  Henry  G.,  223,  228 

American  Federation  of  Labor, 
189;  opposed  by  the  I.  W.  W., 
39 

American  Socialist  Parties 
enumerated,  49,  50 

American  Sugar  Refining  Co., 
production,  169 

Anarchism  described,  46 

Bax,  Belfort,  28 

Bebel,  August,  28,  98 

Belloc,  Hilaire,  31 

Berger,  Victor,  foreign  com- 
merce, 148 

Bernstein,  Ed.,  156,  158,  171 

Beveridge,  W.  H.,  137 

Biological  and  Social  Evolu- 
tion, 197 

Bolsheviki,   The,    44,   225 

Bolshevism,  described,  history, 
41-43;  Ely  on,  45;  the  Dic- 
tatorship of  the  Communist 
Party,  208,  et  seq.;  "Yel- 
lows" and  "Reds,"  209;  is 
revolutionary  Marxism,  236 

Bolshevists,  The,  are  the  "close 
communionists"  of  the  Rus- 
sian social  revolution,  214; 
secure  control  of  Russian 
Government,  217;  the  coup 
d'etat,  218;  a  minority  par- 
ty, 219;  in  1918,  219 


261 


Boudin,  L.  B.,  quoted,  69,  98, 
147,  179,  194 

Bowley,  A.  L.,  93 

Boycotting,  defined,  34 

Brailsford,  H.  N.,  220 

Brain  work,  a  factor  in  labor 
efficiency,  82 

Body  Economie,  unhealthy  con- 
dition of,  122,  123 

Burton,  T.  E.,  causes  of  crises, 
150 

Butler,  Bishop,  quoted,  143 

Capitalism,  evils  of,  122,  123; 
benefits  of,  124,  126;  recuper- 
ative powers  of,  157;  protec- 
tive tendencies  of,  158 ;  proph- 
ecy of  final  overthrow  of, 
202;  strength  of,  203 

Capitalism,  Evolutionary,  201; 
a  mistaken  idea,  201 

Capitalist  Class,  The,  117,  119 

Capitalists,  two  classes  of,  117, 
118 

Christian  Socialism,  26,  29; 
first  writer  on,  27;  Bebel,  on, 
28;  Bax,  on,  28;  Hyndman, 
on,  28;  Flint,  on,  29 

Classes,  Theory  of  origin  of, 
184;  contradictory  historical 
data  in  theory,  185 

Class  Struggle,  The,  67;  Skel- 
ton,  quoted  on,  67;  Marxian 
theory  of,  181,  et  seq.;  con- 
tradictory historical  data  in, 
185;  in  recent  times,  187; 
modern  conditions  in,  188; 
Marx's  prophecy  unfulfilled, 
188;  future  of  the,  191 

Cole,  G.  D.  H.,  on  Guild  Social- 
ism, 40 

Communists,  where  the  name  is 
applicable,  45 ;  will  doubtless 
fail,  in  Russia,  237 

Commercial  Capital,  108 


262 


INDEX 


Communism,  45;  first  use  of 
word,  46;  is  extreme  social- 
ism, 46 

Communist  Manifesto,  1848,  14 ; 
spirit  of,  44 ;  quotations  from, 
88;  on  the  Middle  Class,  174, 
182,  183;  a  call  to  arms,  194, 
195,  208 

Communist  Party,  generally, 
208,  236;  creed  of,  210; 
Tenth  Congress  of,  234;  fer- 
ment in,  226;  ruling  politi- 
cal force  in  Russia,  226;  in- 
dividual liberty  suppressed 
by,  in  Russia,  228;  civiliza- 
tion imperiled  by,  229;  Rus- 
sian membership  of  the,  232 

Complexity  of  Social  Forces,  58 

Concentration  of  Capital,  Marx- 
ian theory  of,  160,  172;  an- 
ticipated by  Pecqueur,  161; 
Pujo  Committee  Report,  166 

"Constant  Capital,"  129;  con- 
trasted by  Marx  with  varia- 
ble capital,  133 

Contradictions  of  Socialists,  147 

•Crises,  Socialist  theory  of,  144, 
159;  Rodbertus,  on,  144;  En- 
gles,  on,  145,  146;  Marxian 
view  of,  145 ;  Socialist  theory 
of  is  false,  150;  self-contra- 
diction of,  151;  Socialist 
prophecy  concerning  the  final 
crisis  groundless,  154;  de- 
fined, 155 

Crisis,  The  Present,  156 

Cunningham,  W.,  91,  92 

Darwinism  and  Marx,  196 
David,  Dr.  Eduard,  98 
Distribution    of    Wealth,    110; 

W.  I.  King  on,   110,   111 
Domestic      and      Professional 

Workers,  141,  143 

Economic  Interpretation  of  His- 
tory, 51;  the  Hegelian  Meth- 
od, 52;  the  Marxian  Theory, 
53;  Modern  Examples,  57; 
Rejected  as  a  guide,  67 

Economic  prophecy,  Futile,  66 


Elimination  of  the  Middle 
Class,  173,  et  seq. 

Ely,  R.  T.,  on  Bolshevism,  45 

Emotionalists,  206 ;  character 
of,  206 ;  effect  of  appeal  made 
by,  on  the  popular  mind,  206, 
207 

England,  M.  T.,  Causes  of 
Crises,  151 

Engles,  Friedrich,  15,  31,  54, 
68,  145,  146,  183,  194,  197 

Enlightened  Socialists,  19;  for- 
mula, 20 

Evolution,  Biological  and  So- 
cial, 197 

Fabian  Socialism,  29;  objects 
of,  30 

Fabian  Society,  The,  29;  some 
members  of,  29 

Factor  of  Scarcity,  The,  76 

Factor  of  Social  Utility,  The, 
77 

Farbman,  Michael,  225 

Farmer  Labor  Party,  50 

Financial  Power,  The,  166 

Fling,  F.  M.,  on  prediction,  66 

Flint,  Robert,  29 

Foreign  Commerce,  148;  Victor 
Berger  on,  148 

Fourier,  Fran?ois,  1,  14 

Franklin,  Fabian,  233 

Friday,  David,  on  Share  of  La- 
bor, 112 

Future  of  the  Class  Struggle, 
191 

General  Federation  of  Labor,  33 
General  Strike,  The,  35 
Giddings,  Prof.  F.  H.,  6 
Giffen,  Sir  Robert,  92 
Government,   Socialist   idea   of, 

58 ;  Marxian  view  of,  narrow, 

63 
Guild  Socialism,  39;  argument 

of,  39-41 ;  Cole  on,  40 

Hegel  and  Darwin,  182 
Hegel,   G.   W.   F.,   51;    history, 

according  to,  52 ;  dialectic  of, 

twisted  by  Marx,  53 


INDEX 


263 


Hegelian  Method,  The,  52 

Higher  Criticism,  10 

Higher  Critics,  The,  18 

Hillquit,  Morris,  33 

History,  Economic  Interpreta- 
tion of,  50,  68;  Marxian  the- 
ory of,  54;  two  distinct  in- 
terpretations of,  54;  Modern 
examples,  59;  Marxians  give 
only  partial  explanation  of, 
61 ;  economic  interpretation 
rejected,  67;  part  played  in, 
by  class  struggles,  187 

Humanitarianism,  64 

Hyndman,  H.  M.,  28,  112,  185, 
199 

Income  of  the  Nation,  115;  dis- 
tribution of,  115,  116 

Inconsistency  of  Socialists,  100 

Increasing  Misery,  Marxian  law 
of,  85,  101;  Socialist  inter- 
pretation of,  87;  Socialists' 
admissions  concerning,  97, 
99;  one  refutation  of,  142 

Industrial  Revolution,  causes, 
etc.,  127,  198 

Industrial  Union,  The,  36 ;  place 
of,  in  politics,  36;  as  viewed 
by  the  syndicalists,  36 

Industrial  Workers  Soviets, 
The,  223 

International  Communist  Par- 
ty, membership  requirements, 
234,  et  seq. 

International  Harvester  Co., 
production,  170 

International  Socialist  Con- 
gress, 1896,  resolution  of  as 
to  crises,  155 

International  Socialist  Con- 
gress, 1904,  resolution  of  as 
to  party,  13 

I.  W.  W.,  The,  37;  some  mem- 
bers of,  38;  original  idea  of, 
38;  Brissenden  on,  38;  the 
direct  actionist  in,  38,  39; 
represents  American  syndic- 
alism, 50 

Jenks  and  Clark,  169 


Fantsky,  Karl,  98,  199 

Kerensky,  Alexander,  49,  216, 
217;  downfall  of,  218 

Keynes,  J.  M.,  115 

King,  Gregory,  92 

King,  W.  I.,  findings  as  to  pur* 
chasing  power  of  hourly 
wages,  96;  on  distribution  of 
wealth  in  U.  S.,  110;  quoted, 
117,  118,  119,  178 

Krasin,  L.  B.,  233 

Labor,  Share  of,  in  some  indus- 
tries, 111;  Streightoff  on, 
111;  David  Friday  on,  112; 
conditions  of  in  the  United 
Kingdom,  113 

Labor  and  Capital,  104,  105 

Labor  Conditions  in  the  United 
States,  Prof.  Fite  on,  95;  Mc- 
Master  on,  95;  Adams  and 
Sumner  on,  95 

Labor-cost  Theory,  Marxian 
construction  of,  71;  impor- 
tance of  theory  so  construed, 
72;  fatal  exceptions  to  this 
construction,  73;  collapse  of, 
75;  Marx's  admission,  79; 
discredited,  83 

Labor  Power,  Marx  definition, 
102;  incorrectness  of  Marx 
definition,  107 

Laidler,  H.  W.,  quoted,  99,  219 
note 

Lasselle,  Ferdinand,  on  law  of 
wages,  87 

Lenin,  Nicolai,  214,  217,  219, 
224,  228 

Levine,  Louis,  36,  37 

Living  Conditions  in  Russia, 
227 

Living  Costs  Determine  Wages, 
86,  et  seq. 

Lowie,  R.  H.,  183 

McMaster,  J.  B.,  life  of  laborer 

in  Revolutionary  times,  95 
Machiavelli,  Nicolo,  238 
Machinery,  Socialist  economics 
of,  127,  et.  seq. ;  Marx's  views 
on,  128;  a  plausible  case,  131; 


264 


INDEX 


Socialist  contradictions  re- 
garding, 132;  may  displace 
labor,  134;  operatives  of, 
135;  makes  for  shorter  days, 
138;  not  a  blight,  139;  has  in- 
creased demand  for  men,  140 

Mallock,  W.  H.,  percentage  of 
land  rent  in  England  and 
Wales,  114 

Malthus,  Thomas  R,  85;  on 
population,  86;  Marx  twists 
theory  of,  89 

Man,  Contradictory  motives  of, 
59 ;  non-economic  instincts  of, 
60;  racial  characteristics  of, 
61 

Manufacturing,  168;  character 
and  extent  of,  168,  171 

Manufacturing  Establishments, 
U.  S.,  168 

Manufactured  Goods,  Value  of, 
how  determined,  78 

Marshall,  Alfred,  standard  of 
living  among  working  classes, 
94 

Marx,  Karl,  2;  Founder  of 
Modern  Socialism,  9 ;  epithets 
of,  excused,  10;  on  Capital- 
ism, 22;  a  dual  personality, 
43;  "not  a  Marxist,"  44;  a 
disciple  of  Hegel,  52 ;  on  sur- 
plus value,  70;  his  adapta- 
tion, 71;  on  labor  value,  74, 
75 ;  admission  as  to  value,  79, 
81;  on  law  of  wages,  88; 
twists  theory  of  Malthus,  89 ; 
pessimism  and  optimism  of, 
90 ;  on  the  ten  hour  law,  98 ; 
definition  of  labor  power, 
102;  celebrated  puzzle  of, 
106 ;  views  on  machinery,  128, 
129 ;  concentration  of  capital, 
162;  disappearance  of  social 
order,  196;  contradictions  of, 
210;  the  prophet  of  all  sects, 
211 

Marxian  Theory,  The,  53;  En- 
gels  on,  54;  applications  of, 
55,  56 

Marxian  view  of  crises,  145; 
contradiction  in,  158 


Marxism  with  Marx  left  out, 
99 

Marx's  Celebrated  Puzzle,  106, 
107 

Mehring,  Franz,  99 

Men,  not  displaced  by  women, 
140;  demand  for,  increased 
by  machinery,  140 

Menshiviki,  The,  42;  chief  er- 
ror of,  43,  48 

Menshevists,  The,  214,  217,  219 

Middle  Class,  The,  Marxian 
prophecy  of  the  elimination 
of,  173,  180;  denned  by 
Marx,  174;  in  agriculture, 
175;  in  manufacture,  177;  in 
professions  and  skilled  labor, 
177;  is  still  dominant,  178; 
persistence  of  in  Europe,  179; 
an  obstacle  to  Socialism,  180 

Migrations,  Causes  and  incen- 
tives of,  56,  62 

Mine  and  Farm  Costs,  77 

Mitchell,  Wesley,  causes  of  cri- 
ses, 151 

Moderate  Socialists  in  Russia, 
43,  45 

Modern  Socialism,  Origin  of, 
2;  Founder  of,  9 

Modern  Socialists,  Ideas  of,  183 

More,  Sir  Thomas,  1 

Mulhall,  Michael  G.,  93 

National  Income,  115;  how  dis- 
tributed, 115,  116 

National  Labor  Party,  50 

New  Zealand,  Industrial  legis- 
lation in,  176,  247;  experi- 
ence of,  248;  the  "Lib-Lab 
Party"  of,  176,  248 

Nonpartisan  League,  The,  50, 
239,  252;  character  of,  239; 
why  organized,  240;  growth 
of,  243;  membership  and 
dues,  243 ;  state  election, 
1916,  243;  organizations  in 
13  states,  243;  total  vote  of, 
1918,  '244;  North  Dakota 
legislation,  1919,  244;  the 
State  Mill  (at  Drake),  247; 
some  Socialist  members  of, 


INDEX 


265 


250;  was  for  a  time  the  real 
government  of  North  Da- 
kota, 251;  discredited  at 
present,  252;  not  a  Socialist 
movement,  252 

North  Dakota,  Production  in, 
239,  240;  three  lines  of  ac- 
tion open  to  farmers  in,  241 ; 
legislation,  1919,  244;  bond 
issue  of  1920,  244;  Mill  and 
Elevator  Association,  245 ; 
the  Bank,  245;  Home  Build- 
ing Association,  245;  Action 
of  Bank,  246 

Olgin,  M.  J.,  228,  229 
Overproduction,  Kind  of,  151 
Optimism    and    Pessimism    of 

Socialists,  13,  87 
Owen,  Robert,  1,  14 
Ownership,    Diffusion    of,    170, 

172 

Partial  Dissenters,  The,  18; 
views  of,  18,  21 

Pasvolsky,  Leo,  224,  234 

Pecqueur,  Constantin,  161 

Plato,  1,  6,  25 

Political  Philosophers,  Visions 
of,  14 

Population,  Increase  of,  in  cap- 
italistic countries,  201 

Production,  Large  Scale,  168, 
170 

Professions  and  Skilled  Labor, 
177 

Proletariat  in  Russia,  211,  213 

Prophecy,  66;  is  groundless,  154 

Protective  Tendencies,  158 

Proudhon,  P.  J.,  on  property, 
121 

Pujo  Committee  Report,  166 

Reason  or  Passion,  204;  as  sole 

motives  of  action,  204,  205 
Rent,  Interest  and  Profits,  120, 

123 
Revisionists,     4;     defined,     10; 

have   abandoned   Marx,   205; 

and    given    up    most    of    his 

theories,  181 


Revolutions,  How,  have  Oc- 
curred, 198;  Hyndman  on 
evolution  of,  199 

Ricardo,  David,  Labor-cost  The- 
ory of,  adapted  by  Marx,  70, 
71 

Rodbertus,  K.  J.,  on  industrial 
crises,  144,  145 

Rohrbach,  Paul,  232 

Rostotsef,  M.  I.,  231 

Russell,  Bertrand,  229 

Russia,  212;  two  revolutions 
expected,  213;  Revolution  of 
1905,  215;  Revolution  of 
1917,  215,  219;  Bolshevists 
secure  control  in  government, 
217,  et  seq.;  the  Supreme 
Power  in,  at  present,  220; 
the  Peasantry,  221;  Commu- 
nist Party  the  ruling  force 
today,  226;  Economic  Break- 
down in,  226;  Birth  and 
Death  rates  in,  227;  Indi- 
vidual Liberty  suppressed  in, 
228;  civilization  of,  in  peril, 
229 ;  industrial  reconstruc- 
tion of,  231;  the  new  middle 
class  in,  231;  capitalism  com- 
ing back  in,  233 

Russian  Central  Executive 
Committee,  220;  membership, 
power  of,  220 

Russian  Economic  System, 
Breakdown  of,  226 

Russian  Peasantry,  conditions, 
actions,  status,  etc.,  221,  et 
seq.;  deprived  of  crops,  229; 
relieved  by  action  of  "Tenth 
Congress,"  234 

Russian  Revolution  of  1917, 
215,  et  seq. 

Russian  Soviets  and  Trade 
Unions  recovering  at  present, 
225 

Sabotage,  34 

Sack,  A.  J.,  219,  note 

St.   Thomas  of  Aquinas,   Ideas 

of,  27 

Saving,  The  effect  of,  114,  121 
Scarcity,  The  Factor  of,  76 


266 


INDEX 


Schaffle,  A.  E.  P.,  224 

"Scientific  Socialism,"  1,  3; 
The  center  core  of,  23;  un- 
scientific character  of,  50; 
how  must  be  judged,  205 

Scientific  Socialists,  9,  25;  in- 
consistency of,  84 

Scott,  Sir  Walter,  on  leprosy, 
91 

Sects  of  Socialism,  The,  22,  50 

Serfdom,   186;    passing  of,   199 

Share  of  Labor,  The,  111,  112 

Shaw,  Bernard,  212 

Simkhovitch,  V.  G.,  44,  68,  147, 
162,  195 

Simons,  A.  M.,  165 

Skelton,  O.  D.,  on  class  strug- 
gle, 67;  on  one  gap  in  the 
Marxian  theory,  107 

Small  property  owners  in  U.  S., 
116 

Social  Democrats,  48 

Socialism:  a  caricature,  3; 
character  of  movement,  4,  5; 
appeal  of,  5;  the  creed  of,  7, 
21;  considered,  11;  not  a  sci- 
ence, 12;  orthodox  doctrines 
of,  16,  18;  the  sects  of,  22, 
50;  propaganda  and  tactics 
of,  24;  first  use  of  word  in 
English,  45;  anarchistic  ten- 
dencies in,  47;  different  in 
every  country,  48;  varieties 
of,  48;  source  of,  64;  histori- 
cal explanation  of,  difficult, 
64;  as  a  theory  of  social  evo- 
lution, 22 

Socialist  Factions  in  every 
country,  50 

Socialist  Party  split  nearly 
everywhere,  235 

Socialist  Theory  is  false,  150 

Socialists,  The  first,  1;  types 
of,  8;  character  of,  13;  are 
optimistic,  13,  87;  desire  of, 
for  party  unity,  13;  votes  of, 
in  U.  S.,  15;  stock  in  trade 
of,  15;  glorification  of  the 
past  by,  90 ;  inconsistency  of, 
100;  mental  attitude  of,  143 


Social  Revolution,  The,  193, 
207;  method  of  the,  194; 
Marx's  contradictions  regard- 
ing, 195;  Marx's  idea  of,  198; 
Marx's  prophecy  not  fulfilled, 
200 

Socialist  Revolutionists,  Rus- 
sia, 48-49 

Social    Unity,    The    Factor    of, 

Soviets  in  Russia,  214-216,  221- 
232 

Spargo,  John,  219,  223,  225 

Spargo  and  Arner,  171 

Standard  Oil  Company,  produc- 
tion, 169 

State  Capitalism,  31 

State  Socialism,  30;  Walling 
on,  31;  Belloc  on,  30;  Hill- 
quit  on,  33;  in  New  Zealand 
and  North  Dakota,  250;  ab- 
horred by  Syndicalists  and 
others,  47 

State  Socialists,  ideas  of,  32,  33 

Stratification  of  All  Society,  186 

Streightoff,  Dr.  F.  H.,  on  share 
of  labor,  112 

Surplus  Value,  Marxian  theory 
of,  102,  126;  a  concrete  ex- 
ample of,  103;  two  sides  to 
the  picture,  122 

Syndicalism,  33 

Syndicalists,  ideas  of  modern, 
as  to  industrial  unions,  36 

Taylor,  W.  J.  Langworthy, 
causes  of  crises,  151 

The  Third  International,  ob- 
jects of,  234 

Thompson,  Slason,  171 

The  Triple  Alliance  in  England, 
190 

Towler  and  Ray,  28 

Townley,  A.  C.,  239,  243,  250 

Trade  Unions,  in  Russia,  224; 
et  seq. 

Trade  Unionists,  in  France,  34 

Trotzky,  Leon,  213,  215,  216, 
217,  219 


INDEX 


267 


Tugan-Baranowsky,    causes    of 

crises,  150 
Two  Sides  to  the  Picture,  122 

Unemployment,  137,  138 
United    States    Census    (1910), 

141,  164,  165,  166,  168 
United   States   Grain    Growers, 

Inc.,  objects,  etc.,  252 
United    States    Steel    Corpora- 
tion, production,  170 
Utility,  as  a  factor  in  value,  81 
Utopian  Socialism,  23,  24,  26 
Utopian  Socialist,  The,  ideas  of, 
8,  9 

Value,  Marxian  Theory  of,  69, 
109;  Boudin  quoted  on,  69; 
Ricardo's  labor-cost  theory 
adapted,  70;  Marx's  adapta- 
tion, 71;  importance  of  the- 
ory, 72;  fatal  exceptions  to, 
73;  collapse  of,  75;  contra- 
dictions in  idea  of,  149 

"Value  Added,"  defined,  168 

Value  of  Labor  Power,  defined 
by  Marx,  88 

Value  of  Manufactured  Goods, 
how  determined,  78 

Value  of  Useful  Article,  criti- 
cism of  Marx's  definition,  80 

"Variable  Capital,"  129;  con- 
trasted by  Marx  with  con- 
stant capital,  133 


Veblen,  Thorstein,   197 
Vexler,  Feliciu,  236 

Wage  Earners,  Organized  and 
Unorganized  in  United  States, 
189 

Wages,  how  determined  by  liv- 
ing costs,  86;  Lassalle's  law 
of,  87;  increases  in  percent- 
age of,  93;  nominal  and  real, 
134 

Walling,  W.  E.,  31 

Wholesale  and  Retail  Trade, 
165 

Webb,  Sydney  and  Beatrice,  on 
condition  of  workers,  93,  94; 
use  of  machinery,  134,  136 

Wholesale  and  Retail  Trade, 
165 

Workers,  Changes  in  the  Con- 
dition of,  92;  Giffen,  Bowley 
and  Mulhall  on,  93;  other 
data,  94 

Workers,  Domestic  and  Profes- 
sional, 141,  142 

Workers'  International  Indus- 
trial Union,  39 

Working  Classes,  earlier  condi- 
tions of,  91,  92;  changes  in 
conditions  of,  92;  standard 
of  living  among,  94;  progress 
among,  97 

"Yellows"  and  "Reds,"  The,  209 
Zagorsky,  S.,  227,  232 


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15 

USepSlll) 


.o;.lay52LU 
24Apr'53flB 

01953  LI. 


20May'57JN 
'     U3 


REC'D  LD 

JUN4    1957 


REC'D  L.D 

FEB  2  7  "B5>  -2  PM 


LD  21-100m-ll>'49(B7146sl6)476 
\ 


YB  078?- 


^700 

WX 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


